Reading List for Young Entrepreneurs

Next week I am going on a short vacation. Which, after six months of working full-time, has allowed me to understand why adults have always loved taking time off at the beach.

The beach is a place where you can lay out, read a book, and do nothing. You can simply relax. Now more than ever have I looked forward to this prospect.

Relaxing and taking time away from work presents the perfect opportunity to focus on personal development. For a few days you can forget about the client project you need to build and solely concentrate on yourself. For me, this means reading.

Books are great (I would have never said this while I was still in college). Taking a few down to the beach while on vacation is a must, and for the past week I have been researching, reading reviews, and deliberating on what books I would purchase and take with me this year. Finally I came up with a list – the theme, entrepreneurship.

Zero to One – Peter Thiel

During my research I found a variety of different reading lists. On every list that was geared towards start-ups, entrepreneurship, or business Thiel’s Zero to One was on it.

After researching further, this book seemed like a must read. A paragraph from the websites about page sealed the deal;

The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Copying others takes the world from 1 to n, adding more of something familiar. But when you do something new, you go from 0 to 1. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace; they will escape competition altogether, because their businesses will be unique.

How Breakthroughs Happen – Andrew Hargadon

Hargadon is a graduate professor of technology management at University of California, Davis. Reading his How Breakthroughs Happen will serve as a substitute for no longer attending college classes. A short summary of his publication convinced me to purchase the book;

How Breakthroughs Happen takes us beyond the simple recognition that revolutionary innovations do not result from flashes of brilliance by lone inventors or organizations. In fact, innovation is really about creatively recombining ideas, people, and objects from past technologies in ways that spark new technological revolutions.

The American Challenge – Jean-Jacques Servan-Schreiber

Published in 1967, The American Challenge is by far the oldest book on my summer reading list. I came across it while reading an article on Peter Thiel’s book recommendations. Thiel said of the book, “[it] got a lot things right, but certainly there were things that didn’t quite happen, and you always have to ask yourselves why they didn’t. This whole category of past books about the future is a very interesting one, and that is one that I always recommend very strongly.”

Hooked – Nir Eyal

I came across Nir Eyal’s Hooked while researching books related to product development. Eyal is a successful business man who presents the “hook model” of engagement. A short summary of the book says;

Hooked is based on Eyal’s years of research, consulting, and practical experience. He wrote the book he wished had been available to him as a start-up founder—not abstract theory, but a how-to guide for building better products. Hooked is written for product managers, designers, marketers, start-up founders, and anyone who seeks to understand how products influence our behavior.

Resources

There are plenty of places online to find other reading suggestions. Here are a few tools I used to help create this reading list for young entrepreneurs.

Don’t Trade Time For Money

How much is an hour of your time worth?

As an employee I am engaged in a trade with my employer. The employer and I have an agreement, a mutual understanding that my time is worth a certain amount of money. As an employee I am in the business of trading my time for money.

The business engages in a different trade with clients. Rather than trading time for money, the company trades value for money.

Trading value for money

At the start-up company I work for pricing is determined by value provided. A client purchases one of our companies services for $xx,xxx. This price is representative of the value that the client is receiving.

If billed hourly the clients price would have only been $x,xxx.

If it takes our company 20 hours to produce or provide a service, and we charge an hourly rate of $100 our cost would have been $2000, and the clients price would end up closer to $5,000. That $5,000 figure is far below the price our company has determined based of value.

When trading value for money the client is generally unaware of the time associated with producing or providing their service. They tend to think it takes a considerable amount of effort, planning and organization to produce or provide their service. The client focuses solely on the value they receive from their purchase. If the client receives that value then everyone is happy.

Starbucks Coffee example

Think of Starbucks Coffee Company and their pricing scheme. A large latte has a price of $3.95. Consumers spend that much for a cup of coffee from Starbucks because of the value they feel they are receiving.

Starbucks has mastered the idea of process (a topic I covered recently) and can produce your latte in under 5 minutes. The cost to make the latte is under $1, and Starbucks churns out hundreds of thousands of these coffee’s everyday. Amazing, right?

The employees at Starbucks agree to trade their time for money. Starbucks takes advantage of this by creating a simple enough process that the employees can create value. Then, Starbucks profits.

Why it works

Scaling a business in this fashion has two immediate and obvious benefits. First, with process in place a business can function with less employees. Second, with value based pricing the business ensures they are charging a high/justified amount to every customer.

Greater margins on every sale, and operating with a leaner staff is a perfect formula for long term success and sustained growth.


Read more about this subject on Patrick Mckenzie’s blog.

Creating Process in Business

Scaling a business requires process. Large, highly profitable organizations master their craft and charge a high premium for their services. These companies minimize cost by creating systems for which things get done.

Creating process is a milestone for a start-up company, because process implies that you have a product or service that is in demand. To increase the likelihood of successful growth and development the organization must standardize the way it produces their products.

Process also reduces and minimizes error. When something is done incorrectly and a mistake is made it is easy to place blame on an individual person. The organization as a whole bears the responsibility for an error made by one of its employees, yet internal mistakes tend to be placed directly on one person. Process helps eliminate this while also exposing the true reason why errors in production occur.

Process in Practice

Recently I have been working on producing a plethora of HTML email templates for a large client. Frequently I have been making errors in production: typo’s, line-spacing issues, cross email client compatibility – each of these errors has plagued my work. In an attempt to reduce these errors and create a more efficient production flow, I have employed the 5 Whys Root Analysis technique.

The 5 Whys is a simple, straightforward and easy to use technique that helps individuals and organizations find the root cause of an issue. As Wikipedia states:

The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?” Each question forms the basis of the next question. The “5” in the name derives from an empirical observation on the number of iterations typically required to resolve the problem.

Here is how I used the 5 Why’s to find a solution for my problem.

1. Why did the email template have errors?
Because our developer overlooked his errors.
2. Why did the developer not find his errors?
Because the developer relied on the account managers to find his/her mistakes.
3. Why do developers rely on account managers?
Because developers do not have a procedure for testing.
4. Why do developers not have a testing protocol?
Because testing takes away time from development.

After the first four questions, it became overwhelmingly clear to me what the issue and subsequent solution were. Both developers, and account managers need a testing protocol.

Since time is hard to come by, developers should have a concise testing protocol and checklist that aims to find technical issues with the code. While account managers should have a similar checklist that looks for grammatical, spelling, and design errors.

Before any final file is sent to the client it must go through these two independent tests. This will initially be a time consuming and tedious procedure, yet over time it will become a part of the process, one that ensures that the company’s reputation maintains its form.

5 Things I’ve Learned Working For a Startup

For the past four months I have been working as a web developer and graphic designer at a small start-up company near Washington, D.C. I have noticed, and come to enjoy five specific aspects of working at this small startup company.

1. There is always something to do.

A startup company should have one constant problem – too much work. Too much work is a not so subtle sign that growth is occurring. (I am painting in broad strokes, but you get the idea).

As a developer and designer I am constantly producing client work or developing features for our in house application. This is a good thing.

Everyday I watch as our company grows and expands.

If you represent growth as a function, then working tirelessly would be the result. Which is true, yet it also means that what we are producing is working, and not only that, it is working well enough that more and more people have interest. This is meaningful, and powerful. If I was not intrinsically motivated to develop I would not last long at a startup.

2. You will always have the opportunity to learn.

Working with a small team of talented professionals helps you grow individually. If you work at a startup you will learn something new that applies not only to your work life, but to your life life.

I constantly ask the lead developer at our company questions ranging from IDE’s and languages to general organization and code modularization.

At a startup your coworkers invest in helping you.

This mentality is bread into the culture of startups. We have hired new employees since I arrived and I have consistently been running to my neighbors desk to help out whenever I can.

Teaching, learning, and growing with one another is a crucial aspect of a successful startups culture.

3. Your voice is heard and will carry weight in discussion.

At a startup company the title on your business card does not matter. Whether you are “junior developer”, or “chief technology wizard” your voice will carry weight in discussion.

At 19 I can offer a different perspective then some of my older coworkers, and much to my amazement (initially), they listen and (on occasion) put in place what I suggest.

If you have a good idea and you share it, your peers will listen.

4. The team makes decision.

When decisions are made there is no ultimate decision maker.

At a startup you work to avoid belittling, or editing something without any purpose. At larger organizations higher-ups can and will intentionally alter a design solely to leave there fingerprint on the process. At a startup you constantly avoid this. The team makes decisions with one purpose in mind – how will this most benefit the customer/user?

5. The team is only as strong as the weakest link.

Consistently working with the same group of people can prove difficult. To avoid stress and maximize communication everyone must be equally engaged and focused on the task at hand.

In this small of a setting it becomes obvious if someone is not pulling their weight. This drags down the entire group and can have extremely negative impacts on the team.

To avoid this a startup must try and help bring these people up to speed, or move along. As the team grows maintaining a high level of work ethic, skill, and dedication is key.


Join the discussion on /r/startups.