Key Principle
When a competitor beats you on product, there is no strategic maneuver that substitutes for fixing the product. The pivot, the down-market repositioning, the partnership — these look like options but they are evasions. Horowitz calls the direct path "lead bullets": unglamorous, hard, and the only thing that works when the problem is competitive inferiority.
The complementary discipline is "This Is Not Checkers; This Is Chess" — the claim that the leader who keeps searching for the next move will find one. The move does not announce itself; the discipline is to keep looking. "I made it. There is always a move." (Chapter 3: This Time with Feeling)
Innovation requires overriding the customer as a precondition for product breakthroughs: "Figuring out the right product is the innovator's job, not the customer's job. The customer only knows what she thinks she wants based on her experience with the current product." (Chapter 3: This Time with Feeling)
Why This Matters
Competitive pressure generates proposals that look like solutions but avoid the actual problem. When BladeLogic was beating Opsware in key accounts, executives proposed going down-market, acquiring a different architecture, or focusing on service providers. Each proposal was coherent on its face. None of them addressed why customers were choosing BladeLogic. The diagnostic Horowitz uses is clean: if customers are not buying at all, the problem may be market positioning — amenable to repositioning. If customers are buying from a competitor, the problem is the product. Repositioning a product problem seals the outcome rather than reversing it.
The second principle — there is always a move — prevents the cognitive collapse that makes product problems fatal. A CEO who accepts there are no options stops searching for options. Technology markets are dynamic: customer needs, competitive positions, technology, and people all move. Surviving into tomorrow creates access to options unavailable today. Horowitz took Loudcloud public in 2001 with $2 million in trailing revenue and six weeks of cash. He made it.
Good Examples
Netscape web server: Microsoft's web server was five times faster and free. Horowitz and Mike Homer developed partnership and acquisition strategies to work around the deficiency. Engineer Bill Turpin rejected both: "Ben, those silver bullets that you and Mike are looking for are fine and good, but our Web server is five times slower. There is no silver bullet that's going to fix that. No, we are going to have to use a lot of lead bullets." (Chapter 3: This Time with Feeling) They fixed performance. The server line reached $400 million in revenue.
Opsware vs. BladeLogic: Multiple executives presented silver-bullet alternatives when BladeLogic gained competitive traction. Horowitz told each: "There are no silver bullets for this, only lead bullets." (Chapter 3: This Time with Feeling) Nine months of hard product work recovered the product lead.
Shipping the wrong product to learn the right one: Opsware's engineering team optimized against known requirements — which were Loudcloud's internal requirements, not the broader market's. Horowitz's diagnosis: "Paradoxically, the only way to do that was to ship and try to sell the wrong product. We would fall on our faces, but we would learn fast." (Chapter 3: This Time with Feeling) The cost of continued internal optimization against the wrong target exceeded the cost of public imperfection.
Counterpoints
Silver-bullet seduction: Proposals that route around a product deficiency — partnerships, acquisitions, down-market moves — have surface plausibility and are emotionally attractive because they avoid frontal conflict. Pursuing them teaches the market that you cannot compete on merit. The competitive disadvantage compounds.
Customer requirements as a ceiling: Product teams that defer entirely to stated customer requirements optimize against the customer's experience with the current product. Customers cannot specify what they have not experienced. "Innovation requires a combination of knowledge, skill, and courage. Sometimes only the founder has the courage to ignore the data." (Chapter 3: This Time with Feeling) Deference to customers produces incremental improvement; overriding them is required for breakthroughs.
Accepting that no move exists: The CEO who concludes there are no options stops generating them. This belief is self-fulfilling. The discipline of chess-thinking — continuous search for the next move — is an epistemological practice, not optimism. Giving up on the search ends it.
Key Quotes
"Ben, those silver bullets that you and Mike are looking for are fine and good, but our Web server is five times slower. There is no silver bullet that's going to fix that. No, we are going to have to use a lot of lead bullets." — Ben Horowitz (quoting Bill Turpin), Chapter 3: This Time with Feeling
"I made it. There is always a move." — Ben Horowitz, Chapter 3: This Time with Feeling
"Figuring out the right product is the innovator's job, not the customer's job. The customer only knows what she thinks she wants based on her experience with the current product." — Ben Horowitz, Chapter 3: This Time with Feeling
"Innovation requires a combination of knowledge, skill, and courage. Sometimes only the founder has the courage to ignore the data." — Ben Horowitz, Chapter 3: This Time with Feeling
Rules of Thumb
- Diagnose before repositioning: if customers buy from a competitor, you have a product problem — no pivot solves a product problem.
- Treat "silver bullet" proposals as a red flag; the more attractive they look, the more likely they are avoiding the real issue.
- Keep the search for the next move open regardless of how bleak the position looks — closing the search guarantees the outcome.
- Ship an imperfect product into the market rather than optimizing indefinitely against internal requirements; market feedback breaks the internal specification loop.
- Override customer requirements when innovation demands it; stated requirements are bounded by the customer's experience with the current product.
Related References
- Truth-Telling and Organizational Trust - how suppressing bad news (including product problems) destroys the organizational intelligence needed to fix them
- Hard People Decisions — Layoffs, Firings, and Demotions - hard decisions about people during the crises that product failures create