I took a recent flight to San Francisco to have meetings with a few startups. Naturally I needed some good reading to immerse myself in for the flight over and back.
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I have to admit, though I’m not a management consultant, I do pickup the big ones from time to time. Good to Great, How to Make Friends & Influence People, The Lean Startup, Innovators Dillemma & Who Moved My Cheese among my favorites.
I’d seen Ben Horowitz’s book “The Hard Thing about Hard Things” in the news. But I also really love the a16z podcast, and although I don’t know a ton about the VC business, I thought it would be a good read.
Boy is that an understatement! The book is so readable & so accessible, there are nuggets of value in there for anyone in the startup world, or building their career, CEO or not!
On the efficient market hypothesis
I had always assumed Adam Smith’s invisible hand was a good theory, almost as scripture. So to see a different perspective on this, and one backed up by real experience. That’s cool.
“No, markets weren’t “efficient” at finding the truth; they were just very efficient at converging on a conclusion — often the wrong conclusion”. p52
What’s more for investors out there, it means good old fashioned investigative work can still turn up gems, that are worth investing in. Word to the wise.
Questions for interviews
Add this one to your list of great interview questions. And if you’re being interviewed, why not volunteer this as an action plan. Great advice!
“What will you do in your first month on the job?” p122
On the Freaky Friday management technique
Freaky Friday was a movie way back in the 80’s. In it a mother & daughter are at each others throats, frustrated with the each other. They end up switching places, and quickly learn to sympathize with the other’s plight in life.
Horowitz decided to put this method to use between two of his managers. Pretty ingenious.
“After just one week walking in the other’s moccasins, both executives quickly diagnosed the core issues causing the conflict. They then swiftly acted to implement a simple set of processes that cleared up the combat and got the teams working harmoniously. p253
On ancient wisdom & hard choices
“In life, everybody faces choices between doing what’s popular, easy, and wrong versus doing what’s lonely, difficult, and right.” p212
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. p213
Boy, can I relate to these bits of wisdom. Running my own business all these years, it hasn’t been easy. There have been ups and downs, and times when people told me to take a different road. But that courage. When you find it, it can be real fuel for you moving forward.
I realized that embracing the unusual parts of my background would be the key to making it through. It would be those things that would give me unique perspectives and approaches to the business. p276
When I work with entrepreneurs today, this is the main thing that I try to convey. Embrace your weirdness, your background, your instinct. p276
I hadn’t really thought of this, and it’s an interesting point. It may be one of the reasons why customers hire me, that I hadn’t realized. Certainly I can give an original viewpoint. But I think I will try to put this to work in the future.
On publicity in ventura capital
This is a curious & fascinating point about the history of venture capital. Ripe for disruption indeed!
Marc discovered that the original venture capital firms in the late 1940s and early ’50s were modeled after the original investment banks such as J.P. Morgan and Rothschild. Those banks also did not do PR for a very specific reason: The banks funded wars—and sometimes both sides of the same war—so publicity was not a good idea. p271
On the Andreesen Horowitz business model
This is pretty cool. Apparently the A16Z business model built a VC firm by helping startup founders in disruptive ways.
We decided to systematize and professionalize the network. p269
They modeled the firm after Michael Ovitz’s Creative Artists Agency. They had managed to “shift the economics of the industry from the corporations to the talent” p270
I guess I instinctively understood this one, but it’s interesting to see it in black and white like that.
You should expect experienced people to be able to forecast their results more accurately than junior people. p250
On checking yourself
Keep yourself honest, ask this question.
“It’s a good idea to ask, “What am I not doing?” p52
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