#10 - The Hard Things About Hard Things by Ben Horowitz

The Hard Things About Hard Things is brutally candid from cover to cover, exploring the harsh reality all entrepreneurs sign up for when they venture into the start-up world. Most books probe on how to do things correctly, but Horowitz focuses on managing awful situations, drawing on his personal experience as a CEO fighting to keep a publically-listed company afloat.

Look no further than the chapter titles to gauge what you can expect from this book: “The right way to lay people off”, “Demoting a Loyal Friend” or “When smart people are bad employees”. 

To be honest, this book wasn’t an enjoyable, comfortable read. It had been recommended to me by two separate mentors that I trust, but I had my doubts as I meandered through the first 100 pages in over two weeks, not finding any consistency or reading rhythm. However, as soon as we encountered a mini-crisis in our company, or as Horowitz would say, went from “peace-time to war-time”, I finished the next 200 pages in a single afternoon. 

My Most Important Lesson from this Book? 

Young start-up founders may justifiably feel the pressure to be overly positive, to instill confidence and motivation in employees. This can potentially lead to subconsciously covering up problems rather than solving them, a short-sited approach that invariably leads to a more severe outcome. 

This is something we feel at MultiplyMii every day, especially when dealing with a Filipino workforce that tends to value stability over potential upside. Horowitz’s mantra is to “tell things like it is”, and discusses the importance of breeding a culture that openly shares bad news and confronts reality, rather than collectively pretending that everything is running smoothly.

How we’ve used this lesson in our company? 

MultiplyMii is an outsourcing solution for companies looking to scale affordably.

Before MultiplyMii’s launch in January 2020, we had set up our recruitment function excellently, identifying an efficient way to source the finest candidates in the Philippines. We don’t pride ourselves on being the cheapest option in the Philippines per se, rather a highly professional solution that mitigates the typical pains of outsourcing, at an extremely affordable price. 

In the first three months after opening our doors, our recruitment function was operating smoothly, but our attrition rates were higher than we’d expected. Dealing with small numbers as we were, we dismissed the problem on a case-by-case basis, curating our own comfortable reality. However, retention rates are perhaps the most poignant issue with outsourcing, so to add value to our clients, we simply had to turn this into our strength. 

Instead of dealing with the issue behind closed doors, we took Horowitz’s advice and tackled the issue head-on. I set up an initiative called Big Problem Solving, in which we split our entire team into small focus groups to approach solving this issue from different angles. This wasn’t a simple exercise - we were trusting our team to remain calm about their job security, despite exposing them to a chink in our armor.  

The strategy was to focus on the first 90 days of employment, as this was understandably the most vulnerable period. The focus groups were split up purposely, with an even spread of senior and junior team members. We approached the problem from the following angles: Candidacy Process, Salary & Benefits, Client Education, Onboarding Process, and Company Culture. Each team brainstormed and presented their initiatives, and once approved, championed their implementation.

Fast forward to December 2020, and our retention rates are above 95%, a staggering statistic, and a core element of our value proposition. Thank you, Ben Horowitz. 

Additional Nuggets of Gold

• Hire for Strengths, not lack of weakness - no employee is perfect, so hire candidates based primarily on a particular area of expertise, as long as they demonstrate a willingness to tackle deficiencies.
• A business isn’t a democracy - involve multiple people in the brainstorming process, but come to the final decision solo. 
• How to Minimize Politics - Horowitz discusses the root cause of most company politics, and how to avoid them. Most notably, by maintaining strict, publicly-communicated policies for organizational design, promotions, and compensation. 

Who Should Read this Book?

Between June to August 2020, MultiplyMii went from a company of 15 employees to 50, and all of a sudden, the company was far bigger than any of the founders. We implemented middle managers, which meant that we weren’t in close contact with most of the new employees. We were covering exponentially more ground than ever before, but every so often, minor growing pains would emerge that we’d never experienced before. 

That’s when I read The Hard Things About Hard Things, and the timing was perfect. The book is a How-To handbook for existing founders transitioning their start-ups to small businesses, and as such, would have far less utility for an aspiring entrepreneur. 

Favorite Quotes

• “If you’re going to eat shit, don’t nibble”
• “People at McDonald’s get trained for their positions, but people with far more complicated jobs don’t. It makes no sense”
• “There’s a saying in the military that if you see something below standard and do nothing, then you’ve set a new standard.”
• “Why dogs at work and yoga aren’t culture”

?Series Introduction - How Books Replaced a College Degree

#10 - The Hard Thing About Hard Things - Ben Horowitz

#9 - The Lean Startup - Eric Ries

#8 - Outliers - Malcolm Gladwell

#7 - Zero to One - Peter Theil

#6 - The Undoing Project - Michael Lewis

#5 - Freakonomics - Stephen D Levitt & Stephen J Dubner

#4 - Steve Jobs - Walter Isaacson

#3 - The Sales Acceleration Formula - Mark Roberge

#2 - Multipliers - Liz Wiseman

#1 - Traction - Gino Wickman