Selva Book Club: The Hard Thing About Hard Things by Ben Horowitz
The below is taken from Selva Ventures’ Q4 2022 Quarterly Investor Letter
This section of our letters will take passages from a relevant investment or business book and share learnings and reflections directly related to Selva.
The 7th installment was a timely choice given the macro environment we’re operating in. The Hard Thing About Hard Things was written by Andreessen Horowitz co-founder Ben Horowitz, who shares the lessons from leading Loudcloud through the depths of the dot com crash and the eventual sale to Hewlett-Packard.
Passage: “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.
Too often we see companies backed against the wall expend their remaining runway firing Hail Mary’s rather than trying to march down the field. We are led to believe there is a clever solution that can be thought of with enough time and strategic brainstorming — that with 4 hours to cut down a tree we should spend 3.5 hours sharpening our axe. The desire the locate the silver bullet often clouds the truth: that hard problems require ugly solutions.
Passage: 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.
I have worked in cultures devoid of trust. Not only are they painful to be part of — they are ineffective and inefficient. It requires so much additional communication to reach a decision — motives are questioned, work is duplicated and smart non-consensus bets can’t get made. Often the necessary trust-building conversations are avoided because “we don’t have time” when reality people are afraid of facing hard truths and being vulnerable.
Passage: Every really good, really experienced CEO I know shares one important characteristic: They tend to opt for the hard answer to organizational issues.
One of our values at Selva Ventures is that “hard conversations are a superpower”. The best leaders don’t shy away from uncomfortable topics — they’re unafraid to get messy because underneath that mess is where personal and organizational growth are found. The learnings from our portfolio track what Ben says about the best CEOs, and we’ve begun prioritizing how to discover these traits in diligence before we invest. More time spent helps, but it’s constructive disagreement and observing their navigating tricky org issues that teaches us the most.
Passage: By far the most difficult skill I learned as CEO was the ability to manage my own psychology. Organizational design, process design, metrics, hiring, and firing were all relatively straightforward skills to master compared with keeping my mind in check. I thought I was tough going into it, but I wasn’t tough. I was soft.
I’ve spoken before about the role of mental health in performance as an investor and entrepreneur. My conviction has only grown with time and experience that mental fortitude is the biggest unlock of professional potential. This past year I began working with a psychologist to improve my performance and well-being as an entrepreneur and investor — the result has been the biggest and fastest step function growth I’ve experienced as a leader. My vision for the future is to share this unlock with our portfolio CEOs — building therapy / psychology / coaching into our term sheets as a condition of working together to destigmatize and provide resources to them.
Please drop a comment on what you think of the format and what suggestions you have for future books. Next quarter’s book will be What It Takes by Stephen Schwarzman.
