The Hard Thing About Hard Things — Ben Horowitz

The Hard Thing About Hard Things is one of the best books I’ve read recently and one of those books whose subject matter is unlikely to interest most of you, but the execution is so good that you ought to read it anyway. The best books transcend their subject; this is probably the best passage in an already great book:

Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship.

Implicitly, you could strike the adjective “business” and replace it with a lot of others… or perhaps strike it altogether and still achieve a similar effect. I’ve often felt exactly what Horowitz is describing but never conceptualized it that way. Over and over again, I found myself marking passages and putting checkmarks next to them. In most books, that practice falls off a third of the way through; in this one, I kept going to the very end.

Many sections just demonstrate that Horowitz gets things. Like:

“What would you do if capital were free?” is a dangerous question to ask an entrepreneur. It’s kind of like asking a fat person, “What would you do if ice cream had the exact same nutritional value as broccoli?” The thinking this question leads to can be extremely dangerous.

Wishful thinking can block useful thinking. Which most of us don’t think, or don’t think consciously.

He’s thinking about antifragility before Nassim Taleb wrote the eponymous book:

The close call was a sign to me that the entire operation was far too fragile. I got another sign when our largest competitor, Exodus, filed for bankruptcy on September 26. It was a truly incredible bankruptcy in that the company had been valued at $50 billion a little more than a year earlier. It was also remarkable because Exodus had raised $800 million on a “fully funded plan” just nine months earlier. An Exodus executive later joked to me: “When we drove off a cliff, we left no skid marks.” It Exodus could lose $50 billion in market capitalization and $800 million in cash that fast, I needed a backup plan.

I’m surprised there aren’t more novels set among venture capitalists or startups. The drama is all there. Maybe most writers don’t realize it, but Horowitz is good at stakes and drama. His stories are too often to quote in full, but they’re full of narrative drama and tension in a way most books aren’t. And some character descriptions are as good as anything in fiction:

Wow. I had no idea who I was dealing with until that point. Understanding how differently Frank viewed the world than the people at Opsware helped clarify my thoughts. Frank expected to get screwed by us. It’s what always happened to him in his job and presumably in his personal life. We needed something dramatic to break his psychology. We needed to be associated with the airport bar, not with his job or his family.

Horowitz had an epiphany and he acted on it. Hard Things could be seen as a series of epiphanies, and we get to follow him through.

We’re often told to attend to data, likely because most people don’t, but once you attend to data, “Sometimes only the founder has the courage to ignore the data.” Like Peter Thiel, Horowitz argues that your life is not a lottery ticket and that markets are often wrong (or at least that insiders can see things that the outsiders who create market values cannot):

If I’d learned anything it was that conventional wisdom had nothing to do with the truth and the efficient markets hypothesis was deceptive. How else could one explain Opsware trading at half of the cash we had in the bank when we had a $20 million a year contract and fifty of the smartest engineers in the world? No, markets weren’t “efficient” at finding the truth; they were just very efficient at converging on a conclusion—often the wrong conclusion.

Almost anyone trying to do anything useful should be thinking about what good ideas are not being pursued: “Wall Street does not believe Opsware is a good idea, but I do.”

“The wrong conclusion:” if markets can converge on “the wrong conclusion,” so can individuals and societies. Some of Hard Things can be read as a critique of American society: “My single biggest personal improvement as CEO occurred on the day when I stopped being too positive.” American society is regularly considered to be positive, but in a way that isn’t necessarily founded on skill or improvement. The “self-esteem” movement is part of this trend, even though moving towards self-efficacy would be an improvement. In class, when I started teaching I was often too positive. Now I’m less positive and more likely to emphasize that growth often comes from pain and struggle. The deadlift doesn’t get higher without some pain, and the best lifters learn to love the pain. Same with intellectual, psychological, or emotional growth. Yet we have a society that shies away from those truths.

I’ve heard about Hard Things many times but this recommendation tipped me into reading it, and I hope my recommendation tips you. The best books can be read many ways and applied to many situations, and this is one of the best. I didn’t expect it to be, which makes it all the more delightful.

The real estate market is peaking:

My Dad met a woman in her early 60s who went back to work as a flight attendant on Jet Blue. Which is a fine and excellent occupation. But she also just got a real estate license, and her plan is to buy houses in Culver City for around $600,000 – $900,000, fix them up, and then flip them—for much more, presumably.

Maybe she doesn’t have the cash to pull off the purchases in the first place. Maybe she won’t be able to get the mortgages. Maybe it’s all hot air.

But maybe it isn’t. In the last two years a real estate frenzy seems to have built up in some markets. The flight attendant needs to find a greater fool before she gets crushed by the carry costs of the houses she’s buying or trying to buy.

Have you seen The Big Short, or read the book? History is repeating itself. The car loan market is already flashing warning signs. That woman’s whole financial life is going to fall apart if she starts trying to flip and the housing market falls.

People who bought real estate in 2009 – 2012 look like geniuses today. But by 2017, the people who bought from 2014 – 2016 might not look geniuses. I hear a lot of people around my age who want to buy stuff because they feel like they’ll be priced out forever if they don’t. That’s the kind of talk that makes me nervous.

In college all everyone talked about was art, drugs, ideas, sex, and parties. The shift to real estate and mortgages is a worrisome one.

Cameras are above all else about sharing

In “Sony’s latest camera and some disappointing sensor sales results,” Phillip Greenspun writes that the reward for Sony’s technically innovative sensors has been flat or declining sales. That’s because Sony misses the point: The number one thing camera companies need to do is integrate with Facebook. Camera companies have no one but themselves to blame for their decline. Way back in 2011 Flip Video had a plan for Wi-Fi enabled video cameras that had a Vine- or YouTube-like social system and interface. Every Flip camera was going to have Wi-Fi as a first-class feature. Cisco unfortunately killed Flip right before the launch, but Flip was at least a company that understood what was happening. In the intervening year zero camera companies have attempted to do what Flip was ready to launch.

Olympus_OMD-1351Which is an amazing story in the annals of corporate stupidity. For the vast majority of people images are ways of signaling: signaling their character, their sense of fun, their sexuality, their lives. Image quality is not terribly important for that purpose, and image quality became “good enough” for most people with the iPhone 4 (which, not coincidentally, Instagram was founded). In 2010. Six years ago. Normal people don’t do detailed technical comparisons of their phone cameras. At most they ask, “Is yours good?” and the reply is usually “Yeah, it’s pretty good.”

The camera companies are technical geniuses and social morons. They ignore the absolute most important use case for 95 – 98% of their market. By now it may be too late to attract users accustomed to high-quality smartphone interfaces. But the camera companies are still barely even fine. The interface for getting photos from the modern cameras I have to my phone is horrific.

Apart from a relative handful of nerds like me, no one gives a shit about image quality once it reaches some acceptable level that it reached long ago. No one wants to recharge batteries or stick the SD card in the computer. For the last five or so years every camera iteration has gotten better autofocus and better low-light performance and a host of other handy but marginal features that no one cares about except professionals and Internet gear wankers.

I wrote about this dynamic in “Photography and Tyler Cowen’s Average is Over.” Others have written about it elsewhere. In that post I also observed that photography companies are also marketing morons. They still are. Greenspun is excited by the release of the Sony A6300. That camera is technically incredible. It also has a terrible name that likely means nothing to 99% of readers of this blog. Except for people who follow cameras with the passion normal people reserve for sports or celebrities, “A6300” means nothing. Sony is missing the main point with its sensors and its cameras. They need more anthropologists / sociologists and fewer outright engineers.

The best medical school, nursing school, and residency admission essay writer, ever: Bess Stillman

Bess Stillman is formally opening her medical school, nursing school, and residency admission essay writing consulting firm. She’s been informally picking up clients through word of mouth for the last decade. Now her website is up and she’s taking clients.

A great essay can be the difference in tens or even hundreds of thousands of dollars in tuition, salaries, interest, and hours worked. Consequently and not surprisingly, smart people realize that the right essay right is insanely important. Bess does them right. I’m a biased party, but if I didn’t think she were really, really good at this genre I’d be silent instead of effusive. I’ve seen her work and acknowledge that she has savant-like skills. One could even offer the ultimate praise and say she has freak-level skills in this domain. Her prices are incredibly reasonable given the services offered.

I’ve seen her conjure up essays, but I’ve also seen her apply those skills in other domains. I’m a professional writer and struggled with the right tone for the query pitch and then dust jacket for Asking Anna. Bess came up with the first, key line:

Maybe marriage would be like a tumor: something that grows on you with time. At least that’s what Steven Deutsch thinks as he fingers the ring in his pocket, trying to decide whether he should ask Anna Sherman to marry him. Steven is almost thirty, going on twenty, and the future still feels like something that happens to other people. Still, he knows Anna won’t simply agree to be his long-term girlfriend forever.

When Steven flies to Seattle for what should be a routine medical follow up, he brings Anna and hits on a plan: he’ll introduce her to his friends from home and poll them about whether, based on their immediate judgment, he should ask Anna. But the plan goes awry when old lovers resurface, along with the cancer Steven thought he’d beaten, and the simple scheme he hoped would solve his problem does everything but.

Wow. This isn’t the sort of skill that can be easily taught or even articulated. Essays for schools and residencies are so short but so key. Bess manages to elicit important information from applicants, decide how it should be structured, and then phrase it in ways that win. She’s an artist for the best self.

Tuft & Needle is doing good things for mattresses:

A friend wrote me to say, “I actually got s bed from tuft and needle (the 10 inch one) on your blog recc and it’s great!”

Admittedly the link wasn’t in the email, but the fact that she likes the bed says good things about the company and the for possibility that they might disrupt the very nasty mattress industry.

Tyler Cowen on Paul Krugman on Amazon on the buzz

In “What is the welfare cost of Amazon supply restrictions on books?” Tyler Cowen writes on whether Amazon’s much-publicized maneuvers against publishers are welfare-enhancing or welfare-destroying; most of the former answers tend to come from readers and indie publishers, while most of the latter answers tend to come from publishers and established authors. I however was compelled to comment on a separate and to my mind under-discussed issue: the lack of any sense of history in most of these discussions.

The same class of writers who five years ago were aghast at the lack of support for literary fiction among publishers now decry Amazon; they’re supporting the same publishers who were until recently the cravenly commercial forces destroying “quality” literary fiction. “The plight of literary fiction” has been an evergreen essay topic for as long as I’ve been cognizant of literary culture. Literary fiction was (or is) in plight because publishers supposedly don’t support and readers are too busy masturbating to romance fiction or science fiction tech fantasies (or whatever) to read lit fic.

Tangentially, I’m also amazed that, in rereading the preceding sentence, it seems to make sense and flow nicely without any commas. Perhaps it is the influence of Steven Pinker’s The Sense of Style, which I bought naturally from Amazon and which has me thinking about nesting and recursion more than any time since CS 102.

The link in the preceding paragraph also goes to Amazon.

Guest Post: I Was Customer Number One for Uber Fresh Yesterday!

This post is by my Dad, Isaac Seliger.

It’s hard to be first at anything in America, but yesterday I was the very first Uber Fresh lunch delivery customer. Uber, which is of course taking on the taxi cartels with reasonable success, is trying to become something like a local Amazon–delivering restaurant meals, late-night rolling papers and condoms, for example, or taking the dog to the groomer, and so on. Since no one—including Uber or Amazon—actually knows how to do this, Uber chose this week to test the lunch delivery market in my neighborhood, Downtown Santa Monica.

Downtown SaMo,* as we locals call it, is Santa Monica’s version of the East Village, where Jake lives now, Capitol Hill in Seattle, where he once lived. Which is to say, the area is composed of lots of apartment buildings occupied either by young hipsters like Jake or geezers like me, but few people in between, since the in-betweeners are in prime family time. In Santa Monica, lots of earnest bars selling hand-crafted $12 cocktails ($15 in the East civet pixVillage), $20 small plates of roasted beets and kale, and $5 cups of pour-over coffee. The tragically hip Funnel Mill coffee shop two blocks from me actually sells $90/cup Kopi Luwak Civet Shit coffee, which Jake and I did not try when he last visited.

In short Downtown SaMo is perfect to test Uber Fresh. This week Uber is testing is a single lunch selection from a local restaurant each day, starting yesterday, which is delivered for $12—including the Uber driver’s cut. At 11:30 AM I placed my order using the Uber app and, as promised, the Uber guy showed up within ten minutes. That’s a big improvement on most delivery, which can take anywhere from ten minutes to an hour to never.

Unlike ordering from Eat24 or GrubHub, however, the Uber driver won’t come upstairs, so I met him at the curb. To me this is a big negative: by the time I overcome inertia sufficiently to get myself together to go downstairs, I might as well continue out the door to the dozens of takeout places within a few blocks of me. Death to inconvenience! That could be the rallying cry of a lot of modern consumer-facing startups. It’s not a bad tagline for my own company, Seliger + Associates.

Anyway, the driver turned out to be the typical Uber driver with an an odd, vaguely Eastern European name and accent, accompanied by an Uberette in her late 20s. She popped out of car with a big smile and a free cookie and declared I was the very first Uber Fresh delivery! It helps that the Uber Development Office is nearby.

But how was the food? The lunch was from Tender Greens, an LA-based salad bar chain, which is okay but not exciting. This described lunch, which consisted of a cup of tepid chicken soup, an ordinary Caesar Salad, and, in my case, a very tasty cookie. The best part the container: a nifty black Uber bag. Sort of a party favor or “party favorite,” as Jake’s younger sister used to call them when she was about four.

uber_bag-1148Although being Customer Numero Uno was interesting, I wouldn’t rush to order Uber Fresh again anytime soon. The food was kind of meh, fairly expensive at $12 and, since I had to go downstairs anyway, I could have walked to about 20 lunch places in ten minutes. As a business, the single-meal option is interesting but also problematic given the target demographic, since just about every resident of SaMo (or the East Village or Capitol Hill), except me, has some kind of food concern/issue, and most will want a vegan/gluten free/non-GMO or something alternative. Jake doesn’t like simple carbs, for example. But, as Joe Bob Briggs likes to say, you might want to check it out.


* [Jake’s note: They do?]

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