Lonely At the Top

Ben Horowitz, The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

I knew this hybrid memoir and advice manual was different on page 20, when Horowitz writes: “We finished the third quarter of 2000 with $37 million in bookings—not the $100 million that we had forecast.” These numbers are so huge, they sound fictional. His massive inter-business contracts and repeated fiscal brinksmanship resemble Jack Ryan adventures. I wondered how they’d reach neighborhood entrepreneurs seeking $30,000 for rent and payroll.

Then I realized: this business book sounds different because it is different. Some books aim for middle managers, people with limited authority but little power, and others offer moral framework without strategic guidance. Horowitz writes for CEOs, division heads, and other top-rank executives who make powerful decisions in essential isolation. Horowitz’ intended audience has probably read innumerable books about how business should work; he illustrates how business really works.

That’s good and bad. CEOs, venture capital entrepreneurs, and other soaring-eagle outliers are probably an underserved market. Middle managers generally have in-house mentors and have so many books written for them, they could get bulk-buying discounts at Books-A-Million. CEOs frequently have to re-invent the wheel, because only a handful ever exist at Horowitz’s level. Horowitz steps into the mentor role, dispensing hard-won advice when every decision costs millions of dollars.

But CEOs at Horowitz’s level remain rare for good reason. When he describes selling his corporation to a competitor, but retaining intellectual property rights, which he leases out for $30 million annually, he clearly operates a business model that only functions among the One Percent. Could you sell anything you made, but still own it, and license it back to your buyer? Unless you’re a software cartel, everybody knows your answer.

Horowitz goes, with shocking haste, from saying something reasonable and necessary, to something so frankly stupid, I wonder if he’s listening to himself. For instance, he discusses the CEO’s importance in creating business culture. Managers should train their own workers at all levels, he says, including CEOs, because hands-on involvement optimizes productivity and employee retention. Essentially, Horowitz wants leaders to lead, not delegate glamorless basics onto subordinates. Huzzah!

Then he concedes business models so lopsided, even this English teacher turned forklift driver wondered how he could be so tone-deaf. Horowitz entered the tech startup business after the 2000 NASDAQ collapse Roto-Rootered the tech stock sector. He clearly thinks this makes him a bold maverick. Maybe. But his company, Loudcloud, made only one product, which only international mega-corporations and governments could afford. That’s a weak foundation for an IPO.

Horowitz repeatedly discusses needing enterprise capital at Defense Department levels, then admits concentrating hundred-million-dollar ventures on only one customer. When that customer takes a $30 million bath, Horowitz must scramble for replacement finance. And I repeatedly pull my beard, screaming: “Diversify, dammit! You have one product, one customer, and one revenue stream; you’re a deathtrap waiting to happen!”

Seriously. If naifs like me are catcalling your business model, you’re in deep shit.

Perhaps you’ve noticed my praise for Horowitz’s book is vague, sweeping, and global. My condemnation runs very specific and detailed. There’s a reason for that. Horowitz propounds principles I find downright admirable; but when the rubber meets the road, he doesn’t honor his own precepts. His doctrines are bold, jargon-free, and exciting. His actions give me the willies. I don’t know how to reconcile the gap.

British psychologist Kevin Dutton has spent decades studying psychopaths. He notes, despite Hollywood stereotypes, that you’re more likely to meet psychopaths in corporate boardrooms than dark alleys. When Horowitz describes himself and his career, he repeatedly rings bells I recognize from Dutton’s writing. Horowitz comes across as a charming, controlling narcissist who doles swift punishment, but evades culpability. By Dutton’s standards, Horowitz is a classic psychopath.

Maybe that’s why there’s never been a book quite like this. Maybe corporate leaders like Ben Horowitz truly don’t see life like ordinary humans. Horowitz verbally advocates putting people first, which I applaud. Then he makes others eat the consequences of his actions. He extols swift, decisive actions, including layoffs, to avoid Dunder Mifflin-ish rumor-mongering and status games. Then he describes scattering pink slips like Halloween candy.

I tried my best to like this book. Horowitz hides little moments of surprising candor and self-awareness like Easter eggs, and I briefly suspect he understands something other business writers miss. Then he apparently fails to notice the gaps between his precepts and his actions, or says something that makes me want a shower. Sadly, I think the rich are just different.