Top Ten Books for Entrepreneurs

I tell students in my entrepreneurship courses at Purdue that leaders read.  However, the nature of the entrepreneurial process makes it tough to recommend good reads. Those searching for a good idea need something different than those who have found one and are in high growth. Meanwhile, some have built a company only to find themselves stuck with an ugly baby.  As such, I’ll clearly identify by stage-of-the-entrepreneurial-process what the book is best suited for.

The “I’m Thinking About It” stage:

Strengths Finder 2.0 by Tom Rath

Founding an enterprise is no small feat. And what is both exhilarating and frightening about it is the breadth of abilities one must bring to the venture. In a start-up you are both a visionary and a grunt worker, you manage the people and the books, you sell and produce your product or service. You are both CEO and janitor.

As such, knowing your strengths serves you well. First of all, to decide if this is truly the path for you. Secondly, to design and shape your business around who you are and what you do best. And finally to determine those areas in which you have weakness or blind spots so that you can fix those quickly.

Think and Grow Rich by Napoleon Hill

This is a classic – originally published in 1937, the work was initiated by Andrew Carnegie, who funded and charged Hill to interview the most successful people of the time and distill what he found. Lucky for Hill that there were amazing people to choose from. He studied 45 people over twenty years – the likes of Henry Ford, Thomas Edison, Alexander Graham Bell, Luther Burbank, and John Rockefeller.

Thought always precedes action – so this is a great book to “think about your thinking”. Hill provides a 13-step formula to help you obtain what you want in life. This may or may not be money, by the way!

The “I Have an Idea that I Think Can Work” stage:

The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber

An entrepreneurial classic – Gerber faces up to the hard truth that far too many people build businesses that they feel trapped in and hate upon success. He is right! As such, he outlines ways in which to avoid this trap and how to build a business that you truly want. This work can guide you step by step into a greater likelihood of building something you love – and that works for you.

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers  by Alexander Osterwalder & Yves Pigneur

Now that your head is on straight, it’s time to design your business and this is, by far, the best way to do that. At the heart of the book is something called a “business model canvas” – a tool you can use to blueprint (and then test) your business. I use this in my entrepreneurship classes at Purdue and the canvas is brilliantly simple – and helps you think clearly about all the elements of your business and how they interrelate.

As if that was not enough value, the authors share different business archetypes, which is critically important today. In the old days the model was to make something and sell it. We are now in an economy where you can make an amazing amount of money by giving your product or service away for free. This book will help you navigate the new business models and put in place a solid blueprint for your new enterprise.

Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renee Mauborgne

A strategy book, which helps you think (and design) for “blue ocean”. This, as opposed to “red ocean” where the sharks of competition are circling and are ready to eat you alive. The concepts are solid, and the thinking is based on research – even though the examples are now dated (published in 2005). Avoiding fierce and bloody competition is a smart strategy, and this book will help you find that space.

Good to Great: Why Some Companies Make the Leap… And Others Don’t by Jim Collins

Although Collins studied large, established companies, there are great lessons for entrepreneurs who want to know how to build a sustainable company that consistently performs at a high level. Hang around successful business people and you’ll hear the Collins influence as they talk about hedgehogs, and who should be on the bus, and flywheels. This is a book that will help you think about your long-term success – and help you build it right from the ground up.

I’ve Launched and Need to Get My Company off the Ground:

Traction: Get a Grip on Your Business by Gino Wickman

I love this book. It is practical, spot on, and about as helpful as any book on my shelves. Wickman outlines the EOS system or Entrepreneurial Operating System with six core elements – from visioning, to people, to money, to process and decision making. Each element has a great set of downloadable tools that I’ve used personally and with clients.

This is not theory, but is a “how-to” manual, with step-by-step directions that are clear, easy to follow, and guide you in the right direction.

We’re Growing Like Crazy and I Can’t Keep Up:

The Breakthrough Company: How Everyday Companies Become Extraordinary Performers by Keith  McFarland

The hard truth is, that the vast majority of new ventures don’t make it “big”. Approximately 25% never survive infancy (year 1) and only about half make it to the 5 year mark. If that is not dismal enough – consider this statistic cited in the book:

Only about 1/10^th of 1% (0.10%) of US firms will ever achieve revenues of more than $250 million in sales. A tiny (0.036%) will grow to reach $1 Billion in sales.

Using a “Jim Collins approach”, McFarland interviews and studies firms that make the leap – and then distills his research into actionable steps a company can take to grow. He identifies six shifts that must occur, and walks you around common pitfalls of the perilous path to growth.

I Want My Work to be More than Just About the Bottom Line:

The New Capitalist Manifesto: Building a Disruptively Better Business by Umair Hague

I am a Hague fan – his books, his blog, his writing for HBR. He pushes me to think differently and deeply about the future and about creating things that have enduring and deep value. I love his ability to challenge capitalism while at the same time firmly espousing it’s potential.

In this book he outlines five cornerstones of prosperity for the 21^st century:

1. Loss Advantage: From value chains to value cycles
2. Responsiveness: From value propositions to value conversations
3. Resilience: From strategy to philosophy
4. Creativity: From protecting a marketplace to completing a marketplace
5. Difference: From goods to betters

A book based on examples – some of which you will want to emulate and others you will want to avoid. It’s my belief that Hague can help you understand and respond to today’s volatile marketplace in a way that other works cannot.

I Want to Build a Business That Affords Me Income and Freedom:

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss

I tend to like books that stretch my thinking – and Ferriss did that, as well as challenge some of my most firmly held beliefs about work. Ferriss describes the new rich as those who work smartly and enough to do what they really want to do – which may be sailing around the world or having adventures in South America.

If that is your vision, Ferriss is your man. But even if you are more traditional, Ferriss presents extreme time management systems (and what entrepreneur could not use that) and a detailed formula for testing product sales on-line (which has high value for many).

So, bottom line – Ferriss pushed lots of my “buttons” but in the process enabled me to rethink some core beliefs, manage my time better and focus on what really matters.

So, fellow entrepreneurs out there – what books guide and inspire you?