1: It was the middle of the dot-com implosion in 2001. Loudcloud CEO Ben Horowitz sat in his office, arms folded.
Across from him sat two colleagues, both of whom had graduated from Stanford Business School.
They presented forty-five slides about why Ben’s decision to start a software division was “quixotic, misguided, and downright stupid,” he writes in his book The Hard Thing About Hard Things.
“They argued that it would steal precious resources from our core business while pursuing a product that would surely fail,” Be recalls.
Ben let them present the entire deck without asking a single question.
When they finished, he said, “Did I ask for this presentation?”
“Those were the first words I spoke as I made the transition from a peacetime CEO to a wartime CEO,” Ben writes.
2: It was a treacherous time. Tech companies were failing fast.
Loudcloud was a startup focused on network security, scaling, and disaster recovery.
Exodus, one of Loudcloud’s competitors, had just filed for bankruptcy. A year earlier, that company had been valued at $50 billion with $800 million in cash.
“I knew we were in deep, deep trouble,” Ben writes.
One day, he asked himself, “What would I do if we went bankrupt?”
His answer surprised him: “I’d buy our software, Opsware, which runs in Loudcloud, out of bankruptcy and start a software company.”
Then, he asked himself a second question: “Is there a way to do that without going bankrupt?”
Ben considered the various paths to move into the software business and exit the cloud business.
“In each scenario, step one was separating Opsware from Loudcloud,” he explains. Ben asked his CTO, “How long would this take?”
“He said nine months, which would prove to be quite optimistic,” he writes.
Ben promptly assigned ten engineers to the project.
3: Which led to the meeting in his office with his two Stanford-educated colleagues.
“Nobody besides me could get us out of the trouble,” Ben recalls, “and I was through listening to advice about what we should do from people who did not understand all the pieces.
“I wanted all the data and information I could get,” he remembers, “but I didn’t need any recommendations about the future direction of the company.”
Why?
Because “this was wartime,” he writes. “The company would live or die by the quality of my decisions, and there was no way to hedge or soften the responsibility. . .
“There would be no: ‘It was a horrible economic environment’; ‘I got bad advice’; ‘Things changed so quickly.’
“The only choices were survival or total destruction.”
When Ben decided to create a separate software business, he told no one else.
“Doing so would have instantly doomed the only business we were in, as everyone would want to work on the future and not the past,” he writes. “I said that [the new software business] was simply another product line.”
Otherwise, the business kept running as before.
“Most things could still be delegated and most managers would be empowered to make decisions in their areas of expertise,” Ben writes, “but the fundamental question of whether—and how—Loudcloud could survive was mine and mine alone to answer.”
More tomorrow!
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Reflection: When the stakes are high in my own life or work, am I willing to stop looking for consensus and instead accept full responsibility for the hard decisions that truly matter?
Action: Identify one “wartime” decision I’ve been avoiding, write down the harshest version of the truth about the situation, and choose one clear, decisive step I will take this week to move from drifting to leading.
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