NOTES FROM: The Hard Thing About Hard Things: by Horowitz, Ben

The only thing that prepares you to run a company is running a company.

At a certain size, your company will do things that are so bad that you never imagined that you’d be associated with that kind of incompetence. Seeing people fritter away money, waste each other’s time, and do sloppy work can make you feel bad. If you are the CEO, it may well make you sick. And to rub salt into the wound and make matters worse, it’s your fault.

In my experience as CEO, I found that the most important decisions tested my courage far more than my intelligence.

When founders come in to pitch our firm — one as the CEO and the other as president — the conversation often goes like this: “Who is running the company?” “We are,” they both say. “Who makes the final decision?” “We do.” “How long do you expect to run that way?” Forever.” “So you’ve decided to make it more difficult for every employee to get work done so that you don’t have to decide who is in charge, is that right?”

Over the past ten years, technological advances have dramatically lowered the financial bar for starting a new company, but the courage bar for building a great company remains as high as it has ever been.

Two core skills for running an organization: First, knowing what to do. Second, getting the company to do what you know. While being a great CEO requires both skills, most CEOs tend to be more comfortable with one or the other. I call managers who are happier setting the direction of the company Ones and those who more enjoy making the company perform at the highest level Twos.

Shit Sandwich. The technique is marvelously described in the classic management text The One Minute Manager. The basic idea is that people open up to feedback far more if you start by complimenting them (slice of bread number one), then you give them the difficult message (the shit), then wrap up by reminding them how much you value their strengths (slice of bread number two). The shit sandwich also has the positive side effect of focusing the feedback on the behavior rather than the person, because you establish up front that you really value the person.

a CEO can most accurately be measured by the speed and quality of those decisions. Great decisions come from CEOs who display an elite mixture of intelligence, logic, and courage. As already noted, courage is particularly important, because every decision that a CEO makes is based on incomplete information. At the time of any given decision, the CEO will generally have less than 10 percent of the information typically present in the post hoc Harvard Business School case study.

Such as: 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

Great CEOs build exceptional strategies for gathering the required information continuously. They embed their quest for intelligence into all of their daily actions from staff meetings to customer meetings to one-on-ones. Winning strategies are built on comprehensive knowledge gathered in every interaction the CEO has with an employee, a customer, a partner, or an investor.

Technical founders are the best people to run technology companies.

Had learned so many hard lessons that building the team was easy. I understood the importance of hiring for strength rather than for lack of weakness, and I understood the meaning of “fit”

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