Six Essential Books For Would-Be Entrepreneurs

Why These Six?

All of these books offer various insights into the process of beginning, establishing, and maintaining a business. Whether you consider yourself an entrepreneur, a small business person, or simply an individual who wants to work for herself or himself, there is something for you in each of these books. But, depending on the size, scope, and type of business you intend to start, you may find yourself gravitating to just one or two.

The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future

By Chris Guillebeau

The $100 StartupThe $100 Startup by Chris Guilebeau acknowledges that startups are risky, but risk is related to security. It may actually be less risky to work for yourself than to work for someone else. When you create your own job, you’re not competing with someone else in the workplace.

Guilebeau encourages the reader to follow his or her passions, but also to realize that they must also add value for their customers. As an example, he remembers that in his early twenties he was very passionate about eating pizza and playing video games, but that he was pretty certain no one would pay him to do that.

It’s not enough to simply be passionate about something. Customers have to be willing to pay you for that product or service.

As the title of the book suggests, in the digital era where products can be made to order, or a service can be offered online, there doesn’t have to be much initial cost in starting your own business.

The reward? Beyond income, an inexpensive startup affords you freedom – freedom to work on what you want to work on, when you want to work on it. You are responsible for your own success.

Guilebeau is also confident that you don’t have to be an MBA or have prior business experience to start your own company. He cites a woman in Portland who opened a yarn store, not because she had been a business owner before, but because as a shopper, she knew what she wanted and it wasn’t being offered.

The $100 Startup is full of such testimonies, as well as dos and don’ts for starting and running a successful business. This book comes highly recommended for those who may not yet be ready to quit their day job, but want to explore entrepreneurial possibilities.

The Lean Startup – How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

By Eric Ries

The Lean StartupIn The Lean Startup, author Eric Ries talks about a myth of American entrepreneurial-ism. The myth holds that all entrepreneurs are amazingly creative and that they intuitively will their products into existence, the visionary who sees what the future holds and brings it to market.

When, in fact, startups aren’t just a product or a service, but a system that includes people. People require management. And while management may seem boring, the decisions you make early in a startup may ultimately determine the success or failure of your business.

This is actually good news for most of us because most of us are not amazingly creative and, with the help of The Lean Startup, we can learn how to make the right decisions that lead to success.

The Lean Startup emphasizes getting products out there before they are finished and then responding to feedback from your customers. You should be prepared to pivot in a new direction, and that you shouldn’t be surprised if the finished product doesn’t even resemble your original idea.

The E-Myth Revisited

By Michael E. Gerber

The E-Myth RevisitedThe E-Myth Revisited maintains that most small business owners aren’t really entrepreneurs. Most entrepreneurs are interested in making money and moving on, while most small business owners have very different goals for their businesses, such as enjoying a certain amount of freedom and autonomy.

One of the biggest mistakes people make when starting a business is to assume that because they know how to do what their business does – web design, accounting, real estate, etc. – they also know how to run a business where people do that thing. The irony is that the business owner’s own expertise in the field is the thing that gets in the way of him or her running a successful business.

Most importantly, Gerber draws the vital, often overlooked distinction between working ON your business and working IN your business. The two are not the same.

Thinking Fast and Slow

By Daniel Kahneman

Thinking Fast and SlowThinking Fast and Slow is a great book for those who are interested in understanding how we make decisions, both good and bad, and want to improve their decision making process.

Kahneman divides the decision making mind into two “systems.”

System 1 is the fast way of thinking, which is more intuitive and emotional (sort of like that mythical entrepreneur Eric Ries talks about in The Lean Startup).

System 2 is slower, more deliberate, and more logical (in the way Michael Gerber in The E-Myth Revisited says small business owners need to be).

Most of the time, we rely on System 1 thinking. Overconfidence or simple intuition can lead to deciding to do the wrong thing. Most of the decisions that business people need to make should actually be made with System 2.

Kahneman shows the reader how to recognize poor decision making in others first, in order to then be able to recognize poor decision making in ourselves.

The Founders Dilemmas – Anticipating and Avoiding the Pitfalls that Can Sink a Startup

By Noam Wasserman

The Founder's DilemmasWhile The Founders Dilemmas focuses primarily on tech and medical science startups, with high revenue potential (as do a remarkably high number of startup books), Noam Wasserman takes care to relate the principles of the book to the small business owner.

What sets The Founders Dilemmas apart from many business books on startups is the wealth of data it draws from. Wasserman tracked the progress of literally hundreds of startups and their founders over a ten year period to draw his conclusions.

At the heart of the book is the idea that most decisions made by founders revolve around whether they wish to obtain wealth from their company or whether they want to maintain control of their company. Of course, founders don’t often see their decisions being either / or, and, in most cases, they don’t even realize their decisions will lead to such outcomes.

The Founders Dilemmas might be best to read after Thinking Fast and Slow as it is essentially a case study for what happens when those early decisions in a startup are made without much thought.

Venture Deals: Be Smarter Than Your Lawyer or Venture Capitalist

By Brad Feld and Jason Mendelson

Venture DealsVenture Deals tackles an often overlooked aspect of starting a business – raising the money. Although Venture Deals, like The Founders Dilemmas, tends to look at high revenue potential startups, the look at the early utilization of Angel Investors, individuals who believe in your business and want to help, should be of interest to the more modest small business owner.

Angel Investors differ from most Venture Capitalists (VC) in that generally they sincerely want to see you succeed. It may come as a surprise to some to discover that VC don’t necessarily have you making money at the top of their priority list.

As with the other books, the use of real life examples makes this otherwise dense, but important, topic accessible to the first time business owner.

Summary

The person who prefers to work at home, possibly with a website, offering a service perhaps, may want to start with The $100 Startup and go no further. If you’re planning to open a store and have employees, you may want to add The Lean Startup and The E-Myth Revisited to your reading list. Or, if you’re thinking about technology, you’ll definitely want The Founders Dilemmas and Venture Deals on your bookshelf. And, regardless of the sector or scope, you’ll find Thinking Fast and Slow extremely helpful in making the right decisions.

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