The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

Chief Executive Officer (CEO) is a title conferred on the individual who manages a company. While the president may be the company’s figurehead, the CEO runs the business and is ultimately responsible for all aspects of its performance. Horowitz reflects on his time as the CEO of LoudCloud and Opsware in the book and specializes in advising founder CEOs as a venture capitalist.

This is a generic term referring to businesses that conduct most or all of their activities via the Internet. The name derives from the most common domain name extension (.com). Many e-commerce and online enterprises began as dot-com startups, including Netscape and other companies mentioned in the book.

An individual who starts a new business or enterprise. Frequently, such businesses are run by the founder and a handful of staff. They tend to be innovative and adaptable to changing conditions, unlike large corporations. Entrepreneurial enterprises are considered high risk but high reward. Horowitz is an entrepreneur as the founder of several companies, and he advises other entrepreneurs at his firm, Andreessen Horowitz.

When Netscape Navigator first launched, it dominated the web-browser market. Because it could run on the Windows operating system, it represented a threat to Microsoft. Microsoft then retaliated by developing Internet Explorer as an alternative browser and bundled Explorer with Windows for free. The competition between Netscape and Microsoft came to be known as the First Browser War.

A founder is the person who develops the concept for a company. They carry the big picture of what the business is supposed to achieve or produce. Because founders tend to take a theoretical approach, they don’t always function well in the role of CEO. Horowitz was both the founder (or co-founder) and CEO of his companies.

IPO stands for Initial Public Offering—the first time a company offers its stock for sale to the public. A bank or investment firm usually acts as the broker to make the company’s stock available on the trading markets. The process of launching stock publicly is laborious and intricate. For Horowitz, LoudCloud’s IPO was a risk due to market volatility, but it ended up paying off.

LoudCloud was the original name of the company that subsequently became Opsware. It was initially conceived to offer hosting services via the cloud to the company’s corporate clients. Horowitz and his partners eventually sold the cloud-hosting component of the operation to AOL.

Netscape was the company that produced the first web browser that could integrate with multiple operating systems. The company’s original name was Mosaic, as was its browser product. This created a problem for the University of Illinois, where the browser was first created, so the name was changed to Netscape. Horowitz met Andreessen, his longtime business partner, while working at Netscape.

Opsware was the software component of the LoudCloud suite and the name of the spinoff company that would ultimately take Opsware’s place. After the cloud-hosting component was sold, Opsware continued to offer enterprise computing functionality to the company’s business clients. It was an early example of software as a service (SaaS). A much better-known example of this concept is Salesforce.

During the tech boom, software engineers in Silicon Valley companies were often offered stock options in addition to regular compensation. While dot-com stocks were climbing to historic highs, many individuals holding these shares became millionaires overnight. The dot-com crash rendered these previously valuable stocks worthless, a fate that Horowitz was able to avoid.

An area south of San Francisco in the Santa Clara Valley that is the epicenter for global high-tech development. The largest city in the area is San Jose. Many tech companies are headquartered in Silicon Valley, and Netscape, LoudCloud, Opsware, and Andreessen Horowitz got its start there.

A venture that has just launched or is still in the developmental stages of launching a business is called a startup. It usually requires financial backing to get off the ground and usually turns to venture capital firms to provide the necessary money. All of the companies Horowitz discusses in the book are startups.

During the late 1990s, investors were very interested in dot-com companies. Because of the novelty of technology products, no one expected a startup company to demonstrate a track record of earnings. People bought tech stocks speculatively. When promised earnings didn’t materialize, the stocks crashed, and many dot-coms went bankrupt. The initial tech boom’s bubble burst during a series of market crashes in the spring of 2000. Horowitz describes these events in detail in the book, particularly how they shaped him as a CEO and founder.