Three Timeless Truths Entrepreneurs can Learn from Alexander Hamilton
Hamilton played a critical role in winning the Revolutionary War, persuading the country to adopt a new constitution, and inventing our financial system. Each of these efforts faced major unforeseen obstacles and are in three very different domains. Not only that, but he faced tremendous personal setbacks as well: he lost his best friend who was killed weeks before the end of the Revolutionary War; he lost his eldest son who was killed in a duel; and, he was marred by our country’s first sex scandal.
What lessons can entrepreneurs learn from a man who lived over 200 years ago? To answer this question, I’d like to start by sharing my story.
The Hardest Day of my Career
Thursday, March 10th, 2016 was the hardest day of my career. That morning, I woke up in a cold sweat. I walked to work with a determined stride and heavy heart. By 9:04am, our entire company had assembled for an “Important All-Hands” meeting. At 9:05am, my pulse began to race as I stood up in front of the hundreds of people I had hired over the last six years and delivered a short and somber message:
I’ve got some hard news I need to share today.
On February 5th, we got a wake up call. On that day public cloud companies collectively lost $28B in market value on a single day. Some of the market value has recovered since then, but the market has clearly shifted. In fact, the market has validated the approach we adopted in August by valuing sustainable businesses.
Given this new reality, over the last month and a half we worked hard to determine the best path forward. We considered all our options and ultimately it became clear that we were over-invested in some parts of the business. Given that employee-related costs are our greatest expense, we went through a very rigorous and meticulous process to comprehensively review every role and determine whether that role is essential to our journey at this time. Through this process we identified 40 individuals across all departments who will not continue with us. All 40 individuals will be notified this morning, and today will be their last day.
To the individuals directly affected, I would like to say a few words. First, thank you. We would not be where we are today without you. This decision was due to factors outside your control and I do not want anyone to view this as a reflection of your performance. I give you my personal commitment to doing everything in my power to help you find a new role.
To those of you who will continue on our journey, I ask for your recommitment. I recognize that will take time, and that’s okay. Tomorrow at 9am we will all meet here again and I will present my case to you for why you should recommit. I will show you what it means to bring our ambition to life and how we will become essential to our customers.
And lastly, I want to acknowledge the pain this decision has caused. I’m sorry. I take ownership of that. While this was a difficult decision emotionally, it was absolutely the right decision to make in order for us to build an impactful and enduring company.
I could see it in their eyes: Stunned. Speechless. Anger. Denial. Tears.
How could a tech startup that had become the #1 most-adopted website optimization platform in the world, that doubled revenue every year for the first five years of existence, and raised over $146m in venture funding get to this point? How would our employees respond to adversity? Are we doomed to failure because we weren’t an overnight success?
The Fallacy of the Overnight Success
The founders of Google, Larry and Sergey, tried to sell their company twice and failed. Excite turned down a $750k offer. Yahoo turned down a $1m offer. Undeterred, Larry and Sergey went back to work recommitted to prove the naysayers wrong. Seventeen years later, Google is now worth over $500b.
In the summer of 2000, Amazon’s stock price had dropped more than two-thirds. Investors worried the company might run out of cash and could file for bankruptcy. By early 2001, Amazon reported a fiscal loss of $1.4b. Undeterred, Jeff Bezos promised analysts that Amazon would report a profit by the end of the year. He laid off 1,300 employees (15%) and focused the business. He fulfilled his promise and the company posted a profit by year end. Sixteen years later, Amazon is now worth over $280b.
The stories of Larry Page and Jeff Bezos are well known in Silicon Valley. One story that is not as well known is that of Alexander Hamilton. What lessons can entrepreneurs today learn from the life of Alexander Hamilton?
Lesson #1: Embrace Adversity
Hamilton faced adversity his entire life. When he was ten, his father abandoned him and his mother. Two years later, his mother died of a fever. Hamilton moved in with a cousin, who then committed suicide and left him with “nothin’ but ruined pride.” What happened next demonstrated how embracing adversity can transform a country forever.
Lin-Manuel Miranda’s hit musical, Hamilton, tells the story beautifully. Here is a short clip of a performance that ultimately becomes the opening song to the musical:
After watching this performance, it is easy to see how someone who had to endure what Hamilton went through would never back down in the face of adversity for the rest of his life.
How would this trait enable Hamilton to help us win the Revolutionary War? On October 14th 1781, the British forces were pinned down at the Siege of Yorktown and the Americans built trenches to slowly encroach on them. The Americans were within 150 yards when General George Washington gave Hamilton command of 400 light infantry troops to lead the assault on the British redoubts using only bayonets.
Hamilton prevailed and the Siege of Yorktown proved to be the decisive victory in the Revolutionary War.
In the face of adversity, Hamilton could have backed down or given up. By embracing adversity, Hamilton was able to lead our nation to victory, and in doing so, build resilience that would serve him well for the rest of his career.
The second lesson we can learn from Hamilton came six years later as our fledgling nation had to figure out how to govern itself.
Lesson #2: Stick to your Vision
Winning was easy. Governing’s harder.
— George Washington to Alexander Hamilton in “Cabinet Battle #1” from Hamilton, The Musical
In 1787, Hamilton was 32 years old. He, and fifty-four other delegates from across our nation converged on Philadelphia in a meeting that would later be known as the Constitutional Convention. The initial goal of the meeting was to revise the existing Articles of Confederation, not write a new constitution. But Alexander Hamilton came with a different agenda: bring his vision to life.
The debate at the convention was so contentious that many attendees were skeptical anything would come of it. Hamilton, an immigrant to the country for which he was now drafting the constitution, took charge. He had a deep desire to preserve the Union and build a nation that could endure.
On June 18, 1787, Alexander Hamilton stood up in front of his fellow delegates for six straight hours and presented his vision for the United States Constitution. Many of his ideas were very unpopular at the time, especially those that were borrowed from the British government. History would prove that Hamilton’s vision for what it took to build an enduring nation was right. Hamilton stuck to his vision, and while the Constitution did not include all of what he wanted (like abolishing slavery), he realized no plan would be perfect, so instead insisted on a Constitution that could amend itself through the will of the people.
After the Constitutional Convention, Hamilton partnered with James Madison and John Jay to persuade his fellow Americans to adopt the Constitution. Their plan was to write 25 essays, later known as The Federalist Papers, with the work evenly divided by the three men. In the end, they wrote 85 essays in the span of six months. John Jay got sick after writing five. James Madison wrote 29. Hamilton wrote the other 51. By relentlessly sticking to his vision, Hamilton persuaded his fellow Americans to adopt our Constitution.
The third lesson we can learn from Hamilton came three years later when Hamilton faced one of the most difficult challenges of his career.
Lesson #3: Think Long-Term
God help and forgive me
I wanna build
Something that’s gonna
Outlive me— Alexander Hamilton in “The Room Where It Happens” from Hamilton, The Musical
After our Constitution was ratified and George Washington elected and sworn in as our first President, he appointed Alexander Hamilton as our first Secretary of the Treasury.
In 1790, the American economy was in shambles and each state was burdened by massive debt after enduring the costs of the Revolutionary War. Hamilton introduced a bill to have the federal government assume all state debt. Many states opposed the measure because it would create a strong central government. It failed to pass twice in the House. Hamilton was despondent because his entire financial plan for the country hinged on this bill.
Hamilton took a shot at persuading an unlikely ally, Thomas Jefferson. At the time there was an ongoing debate about where the permanent U.S. capital should be. Thomas Jefferson favored a site on the Potomac river close to his home in Virginia. Hamilton saw an opportunity, and the now-famous “dinner table bargain” was struck at the home of Thomas Jefferson and led to the Compromise of 1790, which resolved both issues by promising to move the capital from New York to the Potomac in exchange for passage of Hamilton’s bill. Hamilton got substantial criticism at the time for his decision to move the capital from his hometown of New York but his critics have been proven short-sighted. It didn’t really matter where the U.S. capital was because the banks would stay in New York. By thinking long-term, Hamilton was able to achieve his goal of building an enduring nation that would outlive him.
How We Responded
As March 10th approached, I took to heart the lessons of Alexander Hamilton.
First, I embraced adversity. It would have been easy to put my head in the sand and pretend February 5th never happened — hoping that the world would go back to how it once was. But, that would have only exacerbated the problem. The longer we waited to take action, the more money we would burn.
I also felt it was important to live up to our cultural values of Ownership and Transparency. That is why I decided to stand up in front of the company and deliver the news in-person and explain why it was necessary. That is also why I decided to share the news publicly. While not nearly as courageous as Hamilton’s storming of the British redoubt with bayonets drawn, it was hard to do and I’m glad I did it.
Second, I stuck to my vision. On March 11th, we held another all-hands meeting for the company for all of the employees that would continue on our journey. At this meeting, I brought our vision to life. I tried to show, not just tell, the incredible things we would enable our customers to do over the next few years. I asked our team to recommit to our journey.
Third, I am thinking long-term. As I said to our employees on March 10th, this was a difficult decision emotionally, but it was absolutely the right decision to make in order for us to build an impactful and enduring company. Our vision is to enable the world to turn data into action and that is only possible by building a sustainable business. We will continue to do that by democratizing the tools that enable our customers to make better data-driven decisions. I believe we can help transform the culture of businesses that are driven by the HiPPO (Highest Paid Person’s Opinion) to ones that are driven by data. I believe if we deliver on this promise we will be able to build an enduring company that will outlive us all.
How did the team respond? Ready to take the hill, bayonets drawn.
Thanks to Ben Horowitz, Clare Bergman, Eric Siroker, Erin Flynn, Grant Lee, Hannah Siroker, Ilya Fushman, Jason Gatoff, Marianne Siroker, Pete Koomen, Peter Fenton, Sam Altman, Sandi Lurie, Scott Weiss, and Stephanie Robotham for reading drafts of this.
