Author : Josh Kaufman
The book is based on the premise that you can learn the art of business without going to a higher school or by getting an MBA degree. You can learn it by doing business in the real world.
So if you’re thinking of going back to school to get your MBA, read this book first.
Also, if you are already from a business, finance, or commerce background then this book might sound familiar to you.
As a software engineer, I learned a lot of new things from the book. Previously, I used to think that there are only two types of businesses. Product and Services based. But I was amazed to see that there are 12-13 types of businesses described in this book.
The first half of the book focuses on explaining keys terminologies used in business. The real-world strategies to run a profitable business, and demystifying a few myths around the business.
There are five keys components in any business to be successful, ranging from small scale to large scale. Sometimes small-scale business owners are not directly aware of it, but they are doing it unconsciously.
1. Value Creation
If you are solving a problem that does not provide any value to other people, then your business is going to fail.
The biggest problem in any business is to figure out that the problem you are trying to solve does really solve other people’s problems? And if yes, are they willing to pay for it?
Most of the time we think that “If I want it, then everyone else would also want it”. And that is where most ideas fail.
So before putting all your effort in, validate your idea with a prototype. Create a minimal version of your product to check if it is worth pursuing.
Most of the time, rational thinkers like software engineers think of marketing as a gimmick. But that’s not true. To validate your idea you need to have good marketing; otherwise, no one will know what you are offering.
From personal experience, I have created some open source projects, but the one which got the most attention and used many developers was the one I marketed from the beginning.
However, marketing done to influence people on false promises will not survive long.
Below is a really great Ted talk on marketing by Seth Godin.
One of the hardest think about any business is finding customers who actually will pay for your product/service.
Sales people have a bad reputation around people that they force, lure or influence you to buy stuff which you don’t need. That’s why when a normal person sees a sales person, they run away.
The author explains that the key to a successful sale is to know the customer first.
Do they have a problem that your business solves? If not, then don’t force yourself to sell; just move on to find another customer who does have that problem.
Below is a nice short video of John Belfort on HOW TO SELL A PEN.
4. Value Delivery
One of the good things about software and the reason why people like running software businesses is because of ease of delivery compared to other businesses. It takes the same effort to deliver software to one person or a thousand people (until you are scaling like FAANG)
Delivery is not easy with physical good. Take an example of the Nike shoe business created by Phil Knight.
In his memoir Shoe Dog, he mentioned a lot of challenges he faces in delivering shoes. Starting from finding a place for setting up the factory, hiring the workforce to build shoes, and arranging transport to deliver to retailers.
So once you start having customers, start thinking about delivery and make sure they are satisfied.
If you have done all four of the things mentioned above, but you don’t have the cash flow or you run out of cash, then your business is going to doom.
In my opinion, there are a lot of businesses out there, but there are only a few PROFITABLE businesses.
In the current startup culture, most of them focus on growth and do not care about profits or expenses at all.
Also, the big revenue numbers do not indicate that you are in a profitable business. If your revenue is 1 million and your expense is 1.5 million, then your business is running at a loss of 0.5 million.
Keep your finance number always in check. Without cash flow, a business simply cannot function.
The first half of the book focuses on the above five business components, while the second half explores “How to be Productive”, “Invest in yourself”, “Create a System”, and “Analyzing the System.
Identifying key factors which make your business frictionless and profitable, etc.
The second part was mostly repetitive for me and has been summarized in other books like Deep work, Soft Skills, Small Giants, etc.
You can get this book from amazon.
- Education is not the answer to the question. Education is the means to the answer to all questions.
- The quickest and easiest way to screw up your life is to take on too much debt.
- In all the excitement, it’s easy to forget that there’s often a huge difference between an interesting idea and a solid business.
- Ideas are cheap-what counts is the ability to translate an idea into Reality which more difficult than recognizing a good Idea.
- Whenever possible, don’t tell your prospects what you can do to help: show them.
- Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.
- In every negotiation, the power lies with the party that is able and willing to walk away from a bad deal.
- The best way to surpass expectations is to give your customers an unexpected bonus in addition to the value they expect.
- In nature, there are neither rewards nor punishment — there are consequences.
- If you can’t describe what you are doing as a process, you don’t know what you’re doing.
- As a general rule, the more cash your business has at its disposal, the more Options it has and the more Resilient the business becomes.
- Compounding is important because it creates the possibility of huge gains in short periods of time.
- Don’t be too hard on yourself-you weren’t built for the type of work you’re currently responsible for. No one is-we’re all running demanding new software on ancient hardware.
- We don’t see things as they are. We see things as we are.
- Reinterpret your past and you’ll enhance your ability to make great things happen in the present.
- Note books and journals, regularly used, are worth their weight in gold.
- As a general rule, experiences contribute more to happiness than material goods.
- Viewing your mind as a muscle is the best way to help it grow.
- You are the average of the five people you spend the most time with.
- In theory there’s no difference between theory and practice. But, in practice, there is.
- Think less like a tiger and more like a turtle and your business will be to withstand pretty much anything.