Some of the best content to be found about startups is locked in books. Thomas Kjemperud asked me yesterday for a 140 character recommendation of one book for founders. Reducing my list to just one and condensing an argument for why founders ought to read it in just 117 characters was just too great a challenge for me. Instead I’ve written a blog post about the nine favorite books I’ve read over the last five years have helped me understand startups and the processes that make them successful.
They range from written 70 years ago to written in the past 3 years. They have been written by salespeople, CTOs, speechwriters, consultants and magnates. These are the books I go back to, time and again, when I have a question or I’m looking for an insight. If they weren’t all e-books, they would be dog-eared and foxed. Here they are:
How to Castrate a Bull describes the creation and dramatic success of NetApp, the storage company. Unlike most business stories which are penned from the point of view of the CEO, this one is written by the CTO/founder, David Hitz. Hitz lived on a ranch in his youth and draws parallels between the activities on the ranch, like castrating bulls (!), and building a startup. For example, from Hitz’s point of view, politics is the art of getting groups of people to come to a common conclusion by developing consensus. Consensus is a state where all are willing to provide their consent for a decision to take place - not necessarily reaching total agreement, but allowing for the process to go forward. Other chapters focus on risk, including evaluating the risk of entering new markets, of changing corporate culture and attitudes, and of changing CEOs.
The Essential Drucker condenses the extensive writings of Peter Drucker, one of the most respected management thinkers of the last century. I’ve written posts about his views on Communication, Optimal Team Sizes, The Myth of the Generalist, a team member’s Obligation to Dissent. Drucker coined the term information worker and presaged the changing nature of work resulting from people managing data instead of machines. Despite the age of his writings, many of his insights ring true today.
Business Model Generation proposes a visual technique for creating and understanding business models for companies. Each time I meet with a company, I write down the BMG framework in my notebook and fill it in. The BMG is clear and simple but comprehensive. The book also includes many examples of successful companies' models which helped me understand those companies better. But for founders, it’s a good technique to think through different ideas.
Predictable Revenue is the classic SaaS sales handbook. Written by Aaron Ross, one of the first salespeople at Salesforce, Predictable Revenue is one of the first books to describe the inside sales model with sales development teams, inside sales reps and account executives, and the processes that unify them into one coherent performant organization. Some of the techniques described in this book have since been outmoded, but the broad principles still apply.
The Success Equation describes a mental model for risk. I heard about this book because David Lee from SV Angel wrote about it. I read it and I loved the concept. when we make decisions, particularly business decisions, our goal is always to maximize the expected value of an investment. But the expected value is a combination of both skill and luck. Playing a match of chess, I have a 50% chance of winning because both sides start out as equal. That’s the luck part. But if I were to play against the Grand Master, the skill part would become much more important. Understanding this equation, the importance of skill and luck in each major decision involving risk helps us to ensure we are making the right calls. It’s a quick read but a fascinating book that forced me to reflect on my decision-making processes for investments.
To Sell is Human who is a former speechwriter for Al Gore penned this book to proclaim dead the hard sale. Pink’s book argues that the most successful salespeople today, unlike 30 years ago, are the ones who listen to customer needs and match a product’s features and functionality to serve those needs. With a huge volume of information about different products at their disposal, today’s customers are far more sophisticated and consequently demand a different sales process. This book made me reflect on the right characteristics of a salesperson within a company that is pursuing an education sale versus an execution sale.
Like Peter Drucker, Peter Senge is another extraordinary management thinker. In his book, The Fifth Discipline, Senge Describes the four principles that have been well covered in management science before: team learning, shared vision, mental models and personal skills mastery. But the fifth one, the one the book is named after, is Senge’s stroke of genius: systems thinking. Systems thinking, despite its esoteric name is actually quite simple. Systems thinking means looking at a business as a collection of positive and negative feedback loops. Virality is a positive feedback loop. Poor customer support experience leading to churn is a negative feedback loop. Senge argues that management teams ought to consistently develop an understanding of the feedback loop that govern their business and manage those loops actively.
High Output Management is Andy Grove’s seminal work on management. It is the origin for the practice of OKRs, the management technique that Intel and Google, among others, use to set goals for the company and align everyone in achieving those goals.
Zero to One is the compilation of Blake Master’s notes from Peter Thiel’s Stanford class. There are some profound insights in the book. My favorite is the idea that entrepreneurs should develop a secret. A secret is not an unknown. Rather, it’s something just not widely believed to be achievable or feasible. In other words, it’s an insight, a thesis that isn’t widely held that creates a business opportunity.