Summary

Ben Horowitz’ war stories from founding, growing and taking VC-backed technology companies public in the 1990s to mid-2000s. Outlines in detail how he dealt with many situations, but I think you’re better off reading Drucker or Grove.

Key Takeaways

• What I did mattered and would determine whether I would be a hero or a coward.
• If you are going to eat shit, don’t nibble.
• Figuring out the right product is the innovator’s job, not the customer’s job.
• Sometimes the things you’re not doing are the things you should actually be focused on.
• Ask yourself: “What am I not doing?”
• 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.
• Don’t worry about the company’s problems alone. Give it to the person who is excited to fix it.
• In any human interaction, the required amount of communication is inversely proportional to the level of trust.
• Almost every CEO (and human) only takes action on the positive indicator and only looks for alternative explanations on the negative leading indicator.
• Hire for strength rather than lack of weakness.
• Good Product Manager/Bad Product Manager
• There are only two ways for a manager to improve the output of an employee: motivation and training.
  • Being too busy to train is the moral equivalent of being too hungry to eat. 
• The ideal promotion process is built like top dojos: to achieve the next level, you must defeat an opponent in combat at that level. This guarantees that a new black belt is never a worse fighter than the worst current black belt.
• The right way to pick both the best mentors and best employees is by first learning the basics.
• Every time you make the hard, correct decision you become a bit more courageous and every time you make the easy, wrong decision you become a bit more cowardly.
• What makes people want to follow a leader? 
  • The ability to articulate the vision 
  • The right kind of ambition
  • The ability to achieve the vision
• Want to see a great company story? Read Jeff Bezos’s three-page 1997 shareholder letter.
• CEOs should be evaluated against their company’s opportunity—not somebody else’s company.

What I got out of it

Ben Horowitz shares his war stories of founding and growing VC-backed fast-growth technology startups in the 1990s to mid-2000s, ultimately becoming a public company CEO. He tries to provide a manual and the book offers many checklists, step-by-step guides and questions to ask.

While an interesting read as a (business) biography, I got little out of it. I feel:

• The strategies may apply to the niche and at the scale Horowitz operated in…but even then I wonder how much still applies 15 years later (2022) as the landscape has changed significantly.
• Everything outlined is, of course, 1 way of getting things done…but I feel there’s more merit in reading Andrew Grove’s High Output Management or any of Peter Drucker’s works. Horowitz adds little new to the corpus.
• Horowitz shares, given his experience, the ways that worked best for him…but doesn’t share much about what happened 5+ years later – with staff he retained/let go or with the company he sold. Because of this it’s difficult to know whether his approach stands the test of time or not.
• At the time of writing, many tech companies (in Silicon Valley) were dominated by Americans. Fast-forward to 2022 and the workforce is culturally much more diverse, not to mention these kinds of tech companies are now being built and operating outside of the USA too. Living abroad and having worked with people from 50+ countries, the approach Horowitz outlines (probably) works well with Americans, but, from my experience, it probably doesn’t work as well with more distant cultures.

Summary Notes

Introduction

There’s no recipe for really complicated, dynamic situations.

From Communist To Venture Capitalist 

Being scared didn’t mean I was gutless. What I did mattered and would determine whether I would be a hero or a coward.

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.”

“I Will Survive” 

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.”

If you are going to eat shit, don’t nibble.

“Gentlemen, I’ve done many deals in my lifetime and through that process, I’ve developed a methodology, a way of doing things, a philosophy if you will. Within that philosophy, I have certain beliefs. I believe in artificial deadlines. I believe in playing one against the other. I believe in doing everything and anything short of illegal or immoral to get the damned deal done.”

This Time With Feeling 

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.

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.

Markets weren’t “efficient” at finding the truth; they were just very efficient at converging on a conclusion—often the wrong conclusion.

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

When Things Fall Apart 

“There are several different frameworks one could use to get a handle on the indeterminate vs. determinate question.
The math version is calculus vs. statistics. In a determinate world, calculus dominates. You can calculate specific things precisely and deterministically. When you send a rocket to the moon, you have to calculate precisely where it is at all times. It’s not like some iterative startup where you launch the rocket and figure things out step by step. Do you make it to the moon? To Jupiter? Do you just get lost in space? There were lots of companies in the ’90s that had launch parties but no landing parties.
“But the indeterminate future is somehow one in which probability and statistics are the dominant modality for making sense of the world. Bell curves and random walks define what the future is going to look like. The standard pedagogical argument is that high schools should get rid of calculus and replace it with statistics, which is really important and actually useful. There has been a powerful shift toward the idea that statistical ways of thinking are going to drive the future.”
— Peter Thiel

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.

“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.

I follow the 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.

Similarly, if a CEO keeps the following lessons in mind, she will maintain the proper focus when hiring, training, and building her culture.

The Struggle

The Struggle is when you know that you are in over your head and you know that you cannot be replaced.
The Struggle is when everybody thinks you are an idiot, but nobody will fire you.
The Struggle is where self-doubt becomes self-hatred.

The Struggle is when you are surrounded by people and you are all alone.
The Struggle has no mercy.

The Struggle is the land of broken promises and crushed dreams.
The Struggle is a cold sweat.
The Struggle is where your guts boil so much that you feel like you are going to spit blood.

The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak.

There is no answer to the Struggle, but here are some things that helped me:

• Don’t put it all on your shoulders. Nobody takes the losses harder than the person most responsible.
• This is not checkers; this is motherfuckin’ chess.
• Play long enough and you might get lucky
• Don’t take it personally
• Remember that this is what separates the women from the girls

CEOs Should Tell It Like It Is 

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. 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.

Three key reasons to be transparent about your company’s problems:

1. Trust. Without trust, communication breaks. In any human interaction, the required amount of communication is inversely proportional to the level of trust.
2. The more brains working on the hard problems, the better. 
3. A good culture is like the old RIP routing protocol: Bad news travels fast; good news travels slow. A company that discusses its problems freely and openly can quickly solve them. A company that covers up its problems frustrates everyone involved. 

The Right Way To Lay Off People 

During more than twenty years in the venture capital business, he’d never seen a company recover from consecutive layoffs and achieve a billion-dollar-plus outcome. He confessed that he’d bet against that every time. Why all the other startups failed: layoffs inevitably broke the company’s culture. After seeing their friends laid off, employees were no longer willing to make the requisite sacrifices needed to build a company. Although it was possible to survive an isolated layoff, it was hugely unlikely that a company would experience great success. 

The right way:

1. Get your head right
2. Don’t delay. The time elapsed between making the layoff decision and executing that decision should be as short as possible.
3. Be clear in your own mind why you are laying people off.
   1. You are laying people off because the company failed to hit its plan. If individual performance were the only issue, then you’d be taking a different measure. Company performance failed. This distinction is critical, because the message to the company and the laid-off individuals should not be “This is great, we are cleaning up performance.” The message must be “The company failed and in order to move forward, we will have to lose some excellent people.”
   2. A layoff breaks that trust. In order to rebuild trust, you have to come clean.
4. Train your managers. Managers must lay off their own people. How to prepare them:
   1. They should explain briefly what happened and that it is a company rather than a personal failure.
   2. They should be clear that the employee is impacted and that the decision is nonnegotiable.
   3. They should be fully prepared with all of the details about the benefits and support the company plans to provide.
5. Address the entire company before executing the layoff.
   1. The CEO must deliver the overall message that provides the proper context and air cover for the managers. If you do your job right, the managers will have a much easier time doing their jobs. What former Intuit CEO Bill Campbell told me—The message is for the people who are staying. The people who stay will care deeply about how you treat their colleagues.
6. Be visible, be present.

Preparing To Fire An Executive 

The key to correctly firing an executive is preparation.

A four-step process that will treat the executive fairly and improve your company:

1. Root cause analysis.
   1. The wrong way to view an executive firing is as an executive failure; the correct way to view an executive firing is as an interview/integration process system failure. Therefore, the first step to properly firing an executive is figuring out why you hired the wrong person for your company.
      1. You did a poor job defining the position in the first place.
      2. You hired for lack of weakness rather than for strengths.
   2. If you don’t have world-class strengths where you need them, you won’t be a world-class company.
      1. You hired for scale too soon.
      2. You hired for the generic position.
      3. The executive had the wrong kind of ambition.
      4. You failed to integrate the executive.
   3. Nothing will ensure your success like hiring the right executive who has grown an organization like yours very quickly and successfully before.
2. Informing the board. You should have three goals:
   1. Get their support and understanding for the difficult task that you will execute.
   2. Get their input and approval for the separation package.
   3. Preserve the reputation of the fired executive.
   4. Firing an executive turns out to be a piece of news that’s handled better with individual phone calls than in dramatic fashion during a board meeting. It takes a bit longer, but it’s well worth the effort.
3. Preparing for the conversation. You should review any performance reviews or written performance conversations to understand any inconsistencies in your prior communication. Three keys to getting it right:
   1. Be clear on the reasons.
   2. Use decisive language.
   3. Have the severance package approved and ready.
   4. The executive will be keenly interested in how the news will be communicated to the company and to the outside world. It is best to let her decide. 
4. Preparing the company communication.
   1. The correct order for informing the company is:
      1. The executive’s direct reports—because they will be most impacted; 
      2. The other members of your staff—because they will need to answer questions about it; 
      3. The rest of the company. 
      4. All of these communications should happen on the same day and preferably within a couple of hours.
   2. It’s smart for the CEO to act in the executive role in the meanwhile. If you do act in the role, you must really act— staff meetings, one-on-ones, objective setting, etc. Doing so will provide excellent continuity for the team and greatly inform your thinking on whom to hire next.
   3. When you expect your employees to act like adults, they generally do. If you treat them like children, then get ready for your company to turn into one big Barney episode.

Demoting A Loyal Friend 

The good of the individual must be sacrificed for the good of the whole.

Lies That Losers Tell 

Almost every CEO (and human) only takes action on the positive indicator and only looks for alternative explanations on the negative leading indicator.

Lead Bullets

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. We just had to build a better product.

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 

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. 

Take Care Of The People, The Products, And The Profits – In That Order 

Hire for strength rather than lack of weakness.

A Good Place To Work 

In a good organization:

• People can focus on their work 
• People can have confidence that if they get their work done, good things will happen for both the company and them personally. 
• Every person can wake up knowing that the work they do will be efficient, effective, and make a difference for the organization and themselves. 
• These things make their jobs both motivating and fulfilling.

In a poor organization:

• People spend much of their time fighting organizational boundaries, infighting, and broken processes. 
• They are not even clear on what their jobs are, so there is no way to know if they are getting the job done or not. 
• Even if they work ridiculous hours and get the job done, they have no idea what it means for the company or their careers. 
• To make it worse: when they finally work up the courage to tell management how fucked-up their situation is, management denies there is a problem, then defends the status quo, then ignores the problem.

The only thing that keeps an employee at a company when things go horribly wrong —other than needing a job—is that she likes her job.

Why Startups Should Train Their People 

Andrew Grove – “Most managers seem to feel that training employees is a job that should be left to others. I, on the other hand, strongly believe that the manager should do it himself.”

I was frustrated by how little value most product managers added to the business, so I wrote “Good Product Manager/Bad Product Manager,” which I used to train the team on my basic expectations. I was shocked: the performance of my team instantly improved.

Training is one of the highest-leverage activities a manager can perform. To illustrate:

1. You put your department through four lectures
2. Count on three hours preparation for each hour of course time—twelve hours of work in total. 
3. Say that you have ten students in your class.
4. Next year they will work about twenty thousand hours for your organization. 
5. If your training results in a 1 percent improvement in your subordinates’ performance, your company will gain the equivalent of two hundred hours of work as the result of the expenditure of your twelve hours.

When you fire a person, ask yourself: how did you know with certainty that the employee both understood the expectations of the job and was still missing them?

Two primary reasons why people quit:

• They hated their manager; generally the employees were appalled by the lack of guidance, career development, and feedback they were receiving.
• They weren’t learning anything: The company wasn’t investing resources in helping employees develop new skills.

The best place to start is functional training: the knowledge and skill that they need to do their job. 

The other essential component of a training program is management training: this helps set expectations for your management team.

• Do you expect them to hold regular one-on-one meetings with their employees? 
• Do you expect them to give performance feedback? 
• Do you expect them to train their people? 
• Do you expect them to agree on objectives with their team? 
• If you do, then you’d better tell them

After setting expectations, the next set of management courses: teach your managers how to do the things you expect (how to write a performance review or how to conduct a one-on-one).

Once you have management training and functional training in place, there are other opportunities. 

• Take your best people and encourage them to share their most developed skills.
• Training in such topics as negotiating, interviewing, and finance will enhance your company’s competency in those areas as well as improve employee morale. 

There are only two ways for a manager to improve the output of an employee: motivation and training. Therefore, training should be the most basic requirement for all managers in your organization.

The biggest obstacle to putting a training program in place is the perception that it will take too much time. Keep in mind that there is no investment that you can make that will do more to improve productivity in your company. Therefore, being too busy to train is the moral equivalent of being too hungry to eat. 

Hiring Executives: If You’ve Never Done The Job, How Do You Hire Somebody Good? 

With no experience, how do you hire someone good?

1. Know what you want.
   1. The best way to know what you want is to act in the role.
   2. Bring in domain experts. Interview them first and learn what they think made them great. Figure out which of those strengths most directly match the needs of your company.
   3. Be clear in your own mind about your expectations for this person upon joining your company.
      1. What will this person do in the first thirty days?
      2. What do you expect their motivation to be for joining? 
      3. Do you want them to build a large organization right away or hire only one or two people over the next year?
2. Run a process that figures out the right match.
   1. Write down the strengths you want and the weaknesses that you are willing to tolerate. To ensure completeness, include criteria from the following subdivisions when hiring executives:
      1. Will the executive be world-class at running the function?
      2. Is the executive outstanding operationally?
      3. Will the executive make a major contribution to the strategic direction of the company? This is the “are they smart enough?” criterion.
      4. Will the executive be an effective member of the team?
   2. Develop questions that test for the criteria.
   3. Assemble the interview team.
   4. Backdoor and front-door references.
3. Make a lonely decision.
   1. Consensus decisions almost always sway the process away from strength and toward lack of weakness.

When Employees Misinterpret Managers 

Giving the team a task that it cannot possibly perform is called crippling the army (The Art of War). 

Metrics are incentives. This can go both ways as the wrong metrics distract the entire organization.

Management purely by numbers is sort of like painting by numbers—it’s strictly for amateurs.

To get things right, you must recognize that anything you measure automatically creates a set of employee behaviors. Once you determine the result you want, you need to test the description of the result against the employee behaviors that the description will likely create. Otherwise, the side-effect behaviors may be worse than the situation you were trying to fix.

Like technical debt, management debt is incurred when you make an expedient, short-term management decision with an expensive, long-term consequence.

Three popular types of management debt among startups:

1. Putting two in the box 
2. Overcompensating a key employee, because she gets another job offer 
3. No performance management or employee feedback process

Good CEOs share one important characteristic: They tend to opt for the hard answer to organizational issues.

Management Quality Assurance 

Requirements to be great at running HR:

• World-class process design skills
• A true diplomat
• Industry knowledge
• Intellectual heft to be the CEO’s trusted adviser
• Understanding things unspoken

Concerning The Going Concern 

How To Minimize Politics In Your Company

Give someone a raise because he/she requests it and you create a strong incentive for political behaviour. Avoid this by rewarding for outstanding performance that advances the business.

Minimizing politics often feels totally unnatural. It’s counter to excellent management practices such as being open-minded and encouraging employee development.

Two key techniques in minimizing politics:

1. Hire people with the right kind of ambition.
   1. Right ambition: for the company’s success with the executive’s own success only coming as a by-product of the company’s victory. 
   2. Wrong ambition: for the executive’s personal success regardless of the company’s outcome.
2. Build strict processes for potentially political issues and do not deviate. Certain activities attract political behavior:
   1. Performance evaluation and compensation
   2. Organizational design and territory
   3. Promotions

Once you decide, you should immediately execute the reorganization.

Have a formal, visible, defensible promotion process that governs every employee promotion.

Do not attempt to address behavioral issues without both executives in the room. 

The Right Kind Of Ambition 

A company will be most successful if the senior managers optimize for the company’s success (global optimization) as opposed to their own personal success (local optimization). 

No matter how well the CEO designs the personal incentive programs, they will never be perfect.

Title And Promotions 

The Peter Principle: in a hierarchy, members are promoted so long as they work competently. Sooner or later they are promoted to a position at which they are no longer competent (their “level of incompetence”), and there they remain being unable to earn further promotions. This is unavoidable, because there is no way to know a priori at what level in the hierarchy a manager will be incompetent.

Another challenge: the Law of Crappy People. This states: for any title level in a large organization, the talent on that level will eventually converge to the crappiest person with the title.

The best way to mitigate both the Peter Principle and the Law of Crappy People: a properly constructed and highly disciplined promotion process. Ideally, the promotion process should yield a result similar to the very best karate dojos.

• In top dojos, to achieve the next level, you must defeat an opponent in combat at that level. This guarantees that a new black belt is never a worse fighter than the worst current black belt.

Old People 

Ask yourself, “Do I value internal or external knowledge more for this position?” to determine whether to go for experience or youth.

One excellent way to develop a high standard: to interview people who you see doing a great job in their field. Find out what their standard is and add it to your own.

Bill Campbell developed an excellent methodology for measuring executives in a balanced way:

1. Results against objectives. Once you’ve set a high standard, it will be straightforward to measure your executive against that standard.
2. Management. Even if an executive does a superb job achieving her goals, that doesn’t mean she is building a strong and loyal team. It’s important to understand how well she is managing, even if she is hitting her goals.
3. Innovation. It’s quite possible for an executive to hit her goal for the quarter by ignoring the future. For example, a great way for an engineering manager to hit her goals for features and dates is by building a horrible architecture, which won’t even support the next release. This is why you must look beyond the black-box results and into the sausage factory to see how things get made.
4. Working with peers. This may not be intuitive at first, but executives must be effective at communicating, supporting, and getting what they need from the other people on your staff. Evaluate them along this dimension.

One-On-One 

The key to a good one-on-one meeting: understanding that it is the employee’s meeting rather than the manager’s meeting. 

Some effective questions in one-on-ones:

• If we could improve in any way, how would we do it?
• What’s the number-one problem with our organization? Why?
• What’s not fun about working here?
• Who is really kicking ass in the company? Whom do you admire?
• If you were me, what changes would you make?
• What don’t you like about the product?
• What’s the biggest opportunity that we’re missing out on?
• What are we not doing that we should be doing?
• Are you happy working here?

Programming Your Culture 

2 things every technology startup must do. Failure to do both and your culture won’t matter:

1. Build a product that’s at least ten times better at doing something than the current prevailing way of doing that thing.
2. Take the market. If it’s possible to do something ten times better, it’s also possible that you won’t be the only company to figure that out.

Key to cultural design points is shock value. If you put something into your culture that is so disturbing that it always creates a conversation, it will change behavior.

Taking The Mystery Out Of Scaling A Company 

The right way to pick both the best mentors and best employees is by first learning the basics.

Things that cause no trouble when you are small become big challenges as you grow:

• Communication
• Common knowledge
• Decision making

When you scale an organization, give ground grudgingly. Specialization, organizational structure, and process all complicate things and implementing them will feel like you are moving away from common knowledge and quality communication.

The basic steps to organizational design:

1. Figure out what needs to be communicated. Start by listing the most important knowledge and who needs to have it.
2. Figure out what needs to be decided. Consider the types of decisions that must get made on a frequent basis: feature selection, architectural decisions, how to resolve support issues. How can you design the organization to put the maximum number of decisions under the domain of a designated manager?
3. Prioritize the most important communication and decision paths.
4. Decide who’s going to run each group. Notice that this is the fourth step, not the first. You want to optimize the organization for the people—for the people doing the work—not for the managers.
5. Identify the paths that you did not optimize. As important as picking the communication paths that you will optimize is identifying the ones that you will not.
6. Build a plan for mitigating the issues identified in step five.

The Scale Anticipation Fallacy

Asking yourself whether an executive is great can be difficult to answer. A better question: 

• For this company at this exact point in time, does there exist an executive who I can hire who will be better? 
• If my biggest competitor hires that person, how will that impact our ability to win?

How To Lead Even When You Don’t Know Where You Are Going 

The most important thing I learned as an entrepreneur: focus on what I needed to get right and stop worrying about all the things that I did wrong or might do wrong.

The Most Difficult CEO Skill 

By far the most difficult skill I learned as CEO: 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.

Given this stress, CEOs often make one of two mistakes:

1. They take things too personally.
2. They do not take things personally enough.

The key to getting to the right outcome was to keep from getting married to either the positive or the dark narrative.

Techniques to calm your nerves:

• Make some friends. It is useful from a psychological perspective to talk to people who have been through similarly challenging decisions.
• Get it out of your head and onto paper.
• Focus on the road, not the wall. 
• Focus on where you are going rather than on what you hope to avoid.

The Fine Line Between Fear And Courage

The two key characteristics that we look for in entrepreneurs: brilliance and courage.

Every time you make the hard, correct decision you become a bit more courageous and every time you make the easy, wrong decision you become a bit more cowardly.

Ones And Twos

Two core skills for running an organization: 

1. Knowing what to do. 
2. Getting the company to do what you know. 

Follow The Leader 

The most important attribute for a successful CEO is leadership.

How to measure leadership:

• The quantity
• Quality
• And diversity of people who want to follow her.

What makes people want to follow a leader? 

• The ability to articulate the vision 
• The right kind of ambition
• The ability to achieve the vision

Peacetime CEO/Wartime CEO 

In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. 

In wartime, the company has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.

Making Yourself A CEO 

Being CEO requires lots of unnatural motion. In order to be liked in the long run, you must do many things that will upset people in the short run. 

Giving feedback is the building block atop which the unnatural skill set of management is built.

To become elite at giving feedback, you must elevate yourself beyond a basic technique like the shit sandwich. You must develop a style that matches your own personality and values. To be effective:

• Be authentic. It’s extremely important that you believe in the feedback that you give and not say anything to manipulate the recipient’s feelings.
• Come from the right place.
• Don’t get personal. If you decide to fire somebody, fire her.
• Don’t clown people in front of their peers.
• Feedback is not one-size-fits-all. Everybody is different.
• Be direct, but not mean.

Feedback is a dialogue, not a monologue.

Two important positive effects to giving feedback often:

• Feedback won’t be personal in your company. If the CEO constantly gives feedback, everyone she interacts with will just get used to it.
• People will become comfortable discussing bad news. If people get comfortable talking about what each other are doing wrong, it will be very easy to talk about what the company is doing wrong.

How To Evaluate CEOs 

What I think the job of the CEO is and the questions I use to evaluate a CEO:

1. Does the CEO know what to do?
2. Can the CEO get the company to do what she knows?
3. Did the CEO achieve the desired results against an appropriate set of objectives?

Two facets of knowing what to do:

• Strategy. In good companies, the story and the strategy are the same thing. As a result, the proper output of all the strategic work is the story.
• Decision making. At the detailed level, the output of knowing what to do is the speed and quality of the CEO’s decisions.

When a company clearly articulates its story, the context for everyone— employees, partners, customers, investors, and the press—becomes clear.

Want to see a great company story? Read Jeff Bezos’s three-page 1997 shareholder letter. In telling Amazon’s story in this extended form— not as a mission statement, not as a tagline—Jeff got all the people who mattered on the same page as to what Amazon was about.

Great decisions come from CEOs who display an elite mixture of intelligence, logic, and courage.

To prepare for any decision, you must systematically acquire the knowledge of everything that might impact any decision that you might make. Useful questions:

• What are the competitors likely to do?
• What’s possible technically and in what time frame?
• What are the true capabilities of the organization and how can you maximize them?
• How much financial risk does this imply?
• What will the issues be, given your current product architecture?
• Will the employees be energized or despondent about this promotion?

For a company to execute a broad set of decisions and initiatives, it must:

• Have the capacity to do so. In other words, the company must contain the necessary talent in the right positions to execute the strategy.
• Be a place where every employee can get things accomplished. The employees must be motivated, communication must be strong, the amount of common knowledge must be vast, and the context must be clear.

To test whether the CEO can effectively run the company, ask: “How easy is it for any given individual contributor to get her job done?”

CEOs should be evaluated against their company’s opportunity—not somebody else’s company.

First Rule Of Entrepreneurship: There Are No Rules 

Solving The Accountability Vs. Creativity Paradox

Accountability vs. Creativity Paradox.

Look at accountability across the following dimensions: 

• Promises
• Results
• Effort

Holding people accountable for their promises is a critical factor in getting things done. This changes as the degree of difficulty in fulfilling the promise increases.

If someone fails to deliver the result she promised must you hold her accountable? It depends upon:

• Seniority of the employee
• Degree of difficulty
• Amount of stupid risk

The difference between being mediocre and magical is often the difference between letting people take creative risk and holding them too tightly accountable.

The Freaky Friday Management Technique 

Freaky Friday management technique to resolve conflicts between departments: 

• inform the head of Sales Engineering and the head of Customer Support that they will be switching jobs. Permanently. 
• After just one week walking in the other’s shoes, both executives will diagnose the core issues causing the conflict. 
• They then swiftly act to implement a simple set of processes that clears up the combat and gets the teams working harmoniously.

Should You Sell Your Company?

When analyzing whether you should sell your company:

• If you are very early on in a very large market and 
• if you have a good chance of being number one in that market
• then you should remain stand-alone. 
• The reason: nobody will be able to afford to pay what you are worth, because nobody can give you that much forward credit.

The End Of The Beginning 

Hard things are hard because there are no easy answers or recipes.
They are hard because your emotions are at odds with your logic.
They are hard because you don’t know the answer and you cannot ask for help without showing weakness.