The Eight Books to Read Before You Start Your Business
The line about Boston art collector Isabella Stewart Gardner--"She had," wrote her biographer, "the weaknesses of her strengths"--is equally true of entrepreneurs. Their celebrated bias toward action before thought (ready, fire, aim) and their bullish self-confidence make many of them poor at reflection, never mind introspection. To a query I posted on Inc.'s Web site soliciting the titles of books that start-up entrepreneurs should read, one man, whose business had failed after the first year owing "to a variety of unforeseen circumstances," lamented that he might have spent "too much time reading and researching and not enough time doing." Perhaps it was not what he read that did in his venture but what he didn't read that made the oncoming circumstances, for him, unforeseen.
"If I were going to start a new business today," declares Harriet Rubin, who as founder at Currency/Doubleday made her living from the sale of business books for many years, "I wouldn't read anything on how to start a business." But she doesn't mean that--not literally. For aspiring entrepreneurs, good "how-to" books, of which there are many, can provide lots of practical information. (The SmartStart series of state-specific start-up guides from Oasis Press is one that many people recommended.) And the occasional "how-I" book can also be useful, even though I hesitate to recommend one. Most such books commit the sin of urging the reader to believe that there is one set of rules for success--the one that the successful entrepreneur followed--that works for every type of business. In any case, no how-to or how-I book can hold all the information a company builder is going to need. And so even the best ones fall way short of being the only books a founder should read.
What Rubin says she would read instead--or, at least, first--is Carl Jung's Memories, Dreams, Reflections, because in it Jung does not prescribe a set of one-size-fits-all answers but rather, as Rubin puts it, offers "a way of thinking." People about to embark on an entrepreneurial journey would be smart to take Rubin's point, even if they don't choose Jung's book.
In building a reading list that I'd feel comfortable recommending to would-be founders, I've woven into my selection screen some requirements that are often ignored. One is that having all the answers isn't what makes a person a good entrepreneur--it's having a powerful inclination to ask questions. And so only one of the books is on my list because it contains what you'd call practical information. Most are there because they provoke thinking, which is practical only in its consequences.
I looked for books that explore "why-to" questions rather than "how-to," because few of the entrepreneurs I've met (and few of the rest of us, for that matter) give enough thought to the why before plunging straight in. Why do I want my own business? Why do I want to own this business? Contrary to the conventional wisdom, starting a company is not the easiest way to earn a comfortable living. Owning a business is not the functional equivalent of having no boss. And some kinds of businesses just aren't compatible with a good family life or getting enough sleep, no matter how hard you try for balance. Better to sort through your motivations, aims, and priorities now, before you've created something you'll have to back out of--if you can.
It is not only in sorting through life-value issues that entrepreneurs can profit from an inquiring mind. It's in asking why or what if--Why do we do something that way? Why do we do it at all? What if we did it this way?--that most entrepreneurs get their ideas for the products, services, and process innovations they build new companies around. To ask how is to get someone else's answer; to ask why or what if--as Jerry Kaplan does in his book Startup --is to seek your own.
Another characteristic I screened for: the books should be short. Only one of the eight on the list should take more than a couple of days to read, which is not to say that a couple of days is all you should spend on these books.
And finally, as if to recommend just eight books out of the universe of published works weren't in itself an act of high conceit, I have compounded the sin by suggesting an order--the order of their appearance in the pages that follow--in which the eight might most usefully be read. The order proceeds from the most to the least abstract, from the general to the particular, and from the referential to the direct. It proceeds, if you will, from considerations of life to considerations of living. You could easily skip the first two books and ignore the questions they raise for now, but someday you'll have to find your peace with those issues. Starting now can't hurt.
By Kurt Vonnegut Jr.
There's a paradox in entrepreneurship that isn't easily captured. Kurt Vonnegut comes close in his first novel, Player Piano, originally published in 1952, which wouldn't have made this list but for the suggestion of Nancy Austin, a frequent Inc. contributor. She finds it a potent essay on the limits of control--managerial and technological. It also expresses a theme that runs through most of Vonnegut's work, namely, that people--which would include entrepreneurs--are ultimately their own worst enemies.
In the story, engineers and managers join entrepreneurial forces around the computer after World War II to create a more orderly and efficient world. Eventually, vacuum-tubed machines, tended by a handful of maintenance personnel and superintended by a hierarchy of upper-level managers, take over most of the jobs in the country, including those of many of the engineers who created them. The redundant people, who turn out to be nearly everyone, are assigned make-work, given pocket money, and housed and fed in proportion to their IQs.
In Vonnegut's imagined future, society, politics, the economy, and culture are all in stasis; rules, roles, and ideas are fixed, administered by managers and executed by machines. Everything is supposed to go humming right along, but the masses, robbed of the work that gave their lives purpose and dignity, attempt, unsuccessfully, to revolt.
Two of the managers who helped engineer the new society drop out to join the revolution. Now they sit drinking amidst the ruins of a sprawling automated factory complex that they had built and then helped to destroy. One of them, the book's protagonist, observes:
"Most fascinating game there is, keeping things from staying the way they are."
"If only it weren't for the people, the goddamned people," said Finnerty, "always getting tangled up in the machinery."
That's the paradox--that it's possible, even likely, that successful entrepreneurs will build the very kinds of organizations and institutions that drove them to entrepreneurship in the first place. In the interest of maintaining control, they become the kinds of managers in the kinds of organizations that they once reviled. In other words, you end up in the place you thought you were running away from.
In Player Piano, Vonnegut shows why it happens, if not exactly how to prevent it from happening to you.
On Not Knowing How to Live
By Allen Wheelis
"I have come to a strange land," Allen Wheelis's little book begins. "I do not understand the language."
This book is California psychoanalyst Wheelis's cogitation on the relationship of individuals to spirit--whatever is greater than man and is infinite in time.
The strange land that Wheelis has found is not entrepreneurship per se, of course, but life--the time-space we occupy between birth and death. "To live at all is to be doomed," he points out. Happy thought. So we stay busy.
But building a company, even one that succeeds by mammon's measure, is an imperfect hedge against despair. We seek a legacy, but Stone wears away, and who will read Proust in a thousand years? And what's a thousand years to the appetite for immortality?
This book is a lyrical reminder that we search futilely for meaning in the ephemeral institutions that man has built--including our own creations. A business does not a life make. Take care that you don't rely upon company building for rewards it can't deliver. And remember that to equate your business with your self is to court disaster.
By Stan Davis
They say nothing's faster than change in business today. So what could Stan Davis's Future Perfect, a book about the future written 11 years ago, say to today's entrepreneur? Plenty. Maybe more, in fact, than when Davis wrote it.
If Vonnegut ignites a flare that throws a harsh light on the sociological context of entrepreneurship and Wheelis stumbles with a dim candle through the spiritual corridors, Davis shines a laser on the business setting.
The book's title connotes a perspective: the view from that point in time at which the anticipated or imagined future has already arrived. From the future-perfect perspective, the present is already the past. It's a mind game that Davis plays, but not just a mind game: entrepreneurs and managers with a future-perfect perspective think and behave differently from those who, because they are present oriented, must settle for catching up. The present instantaneously becomes the past, so entrepreneurs with a present perspective will always be behind; to them, time is a constraint. For those with a future-perfect perspective, it's a resource; they've got time to get ready. Present-thinking company founders are late even as they start.
Today's present validates much of the future-perfect thinking that Davis himself engaged in when writing his book. Products and services have leaped toward mass customization and instantaneity--consider Levi's custom-made jeans delivered in days. "There is a competitive advantage in providing the same product or service, at the same price, in 20% less time," Davis wrote. No surprise there; incremental improvements do have value. But incremental thinking will leave a company--or a founder--falling behind because it is by definition self-limiting. The results at best can only be incremental. What competitors need to be thinking about is not, say, reducing the time from order to delivery but eliminating it; not the miniaturization of mass but its elimination; not many-place delivery but any-place delivery. Davis would call this "transformative" thinking because it imposes no limits on its own results. It seems to be the only kind of framework that will keep a company competitive these days. "Speaking practically, what-ever your business, think about how you can create products and services in real time that you can deliver instantly. Even in the slowest-moving company, this contextual shift will speed things up."
Of course, you've heard all those admonitions before, but Davis creates standards against which would-be business builders ought to measure their own thinking about how their companies are going to work. To some readers, some of Davis's chapters--those on "any-place" and "no-matter" in particular--may sound old hat, but I'd be careful about skipping over them. One has only to be a customer in America today to know how far short most companies still fall of future perfect.
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It
By Michael E. Gerber
The problem with most failing businesses I've encountered is not that their owners don't know enough about finance, marketing, management, and operations--they don't, but those things are easy enough to learn--but that they spend their time and energy defending what they think they know.
--Michael E. Gerber,
The E-Myth Revisited
We begin our discussion of Gerber's book with a quote about owners of failing businesses because that's what most founders quickly become. But starting a company isn't like shooting craps, in which winning is all in the luck of the throw. More companies would succeed, says Gerber, but for the E-Myth, "a romantic belief that small businesses are started by entrepreneurs, when, in fact, most are not." Most businesses, Gerber says, are started by technicians--people who know how to do something. The barber starts a barbershop and the cook, a restaurant--on the fatally erroneous assumption that to understand the technical work is to understand the business that does it.
So technicians should not start businesses? No, that's not Gerber's message. "Everybody who goes into business," he claims, "is actually three-people-in-one: the Entrepreneur, the Manager, and the Technician." The technician in you can do the work, but it can't run the business, and it certainly can't grow it. Those are the jobs of the manager and the entrepreneur. Owners need to get their roles straight--their job is to work on the business, not in it.
One reason this book is fourth on the reading list is that it wrings a methodology out of the metaphysical. You've been speculating about your place in God's universe and in man's, indulging in the daydream of yourself as the successful entrepreneur, and along comes the unromantic Gerber, who says, OK, it's time to make some choices. What are your aims in life? How much money do you need? And so on, from big choices to small ones--from your organizational strategy (you've thought about that, haven't you?) to how you'll decide what color to paint your product or logo.
There are no answers in Gerber's book; it's a framework that guides you along a logical path of inquiry.
One piece of advice that Gerber keeps coming up with: "Your business is not your life." Shades of Wheelis.
The Practice of Management
By Peter F. Drucker
You are about to become the manager of the business you will soon create. But what does it mean to manage? Better to ask now than to wait until the task is upon you.
There's a hint at what's involved in The E-Myth Revisited, but you'll sense when you're reading it that Gerber's language is too spare, clipped, epigrammatic--just short of glib--to be authoritative. The value he adds is the business-development framework. For substance and depth on management there's only one writer to read: Peter Drucker. But which Drucker book? He's written a couple dozen.
Not a few people promoted Innovation and Entrepreneurship, published in 1985, for inclusion here on the grounds that this is, after all, a reading list for entrepreneurs. But I'm suggesting instead The Practice of Management, published in 1954, which is the more inclusive work. (It got its own fair number of recommendations.) No other book that I'm aware of captures so thoroughly and yet so succinctly the principles of business management. Reading Drucker won't make anyone a manager--he's more scholar than trainer--but without having read and absorbed the wisdom of Drucker, it would be substantially more difficult for entrepreneurs to understand the roles and duties of managers and to evaluate the worth of the countless management techniques that they'll hear touted.
What, for instance, have Theory Z, MBWA, Anita Roddick, or reengineering changed about the truth of this short excerpt from Drucker's introductory chapter?
The final function of management is to manage workers and work....This implies organization of the work so as to make it most suitable for human beings, and organization of people so as to make them work most productively and effectively. It implies consideration of the human being as a resource--that is, as something having peculiar physiological properties, abilities, and limitations that require the same amount of engineering attention as the properties of any other resource, e.g., copper. It implies also consideration of the human resource as human beings having, unlike any other resource, personality, citizenship, control over whether they work, how much and how well, and thus requiring motivation, participation, satisfactions, incentives and rewards, leadership, status and function. And it is management, and management alone, that can satisfy these requirements.
New Venture Creation: Entrepreneurship for the 21st Century
By Jeffry A. Timmons
Now, after Drucker on management, comes the book about entrepreneurship: Jeffry Timmons's New Venture Creation. But it's dry, dry, dry, you say. Yes, and it's also full of information you don't need right now. (And it's printed on annoyingly shiny paper.) So why read it?
Because no one can teach you or anyone else how to be an entrepreneur, but a good teacher can describe the process. Timmons, who teaches courses at Harvard Business School and at Babson College, is a good teacher, and he draws on lots of experience, from both the classroom and the real world.
Actually, there are four good reasons for slogging through New Venture Creation now, even if you don't read every word of it or work through all the exercises. The first reason is that it's all here. Not the artistry of entrepreneurship, of course. That's where the entrepreneur comes in. But Timmons covers the tools and techniques. Even if you don't need all of them now, isn't it better to know they exist and that you can look them up when you do need them? Second, a casual cruise through the book is sobering: there are maelstroms you could fall into (see, for instance, on page 562, "IRS: Time Bomb for Personal Disaster") and really hard problems you're going to have to solve (see, for instance, "The Family Venture Team," on page 288). The third is that lots of people have already done what you propose to do--that is, start a company--and Timmons has collected many of their experiences here. Why should you stagger through the entrepreneurial process blind when others have already explored and mapped it, and why not at least be aware of what they've learned? The fourth reason for reading the book now is that once you're into the start-up process, you'll never take the time. "Couldn't someone have warned me about this?" you'll be asking yourself someday. Someone did, but if you haven't pushed yourself through Timmons's book, you may miss the message.
Startup: A Silicon Valley Adventure
By Jerry Kaplan
By chapter two, Jerry Kaplan had me hooked. I already knew the ending of Startup, just as I knew the ending of Titanic. It was finding out how, exactly, the ship and Kaplan's new venture both went down that held my attention. You want real-life entrepreneurial adventure? This is it, without the banal generalizations that most CEO authors attach to their particular experiences.
The magical "aha," the moment of conception, comes early in the book (on page 13, to be precise). Early in 1987, Kaplan, who had a Ph.D. in artificial intelligence, was working for Mitchell Kapor, founder and then CEO of Lotus Development Corp., on a program that eventually would become Lotus Agenda. Kapor and Kaplan were on a small private jet, and Kaplan saw Kapor typing stuff into a PC. Kaplan stared at him:
"You OK?" [Kapor] asked.
I was quiet for a moment, trying to get my bearings. Suddenly I knew what was bothering me. "Mitchell, suppose you used a pen instead of a keyboard."
"What do you mean?"
"Suppose that instead of typing in text, you write with some sort of stylus directly on the screen. If it was possible to sense where the tip of the pen was, electronic ink could appear on the screen right under it, and it would look like you were drawing a line...."
"A device like that would be more like a notebook or pad of paper than a laptop," Mitchell observed. "In fact, the thing would be so different, you'd need a whole new approach to software."
We both sat in stunned silence as this insight sunk in....
Seven years and $75 million in other people's money later, GO Corp., the company Kaplan founded to create and market a pen-based computer, disappeared into the ether from which it had materialized. But Kaplan had kept a diary, which inspired this entertaining narrative about the entrepreneurial process.
To be sure, Kaplan's adventure is not every entrepreneur's experience: his was a Silicon Valley start-up in which many of the players were already celebrities, and the stakes--at one point his enterprise had a capital valuation greater than $150 million--were not small change.
But there are two reasons Startup made the reading list. The first is that it emphasizes the stunning contrast between the entrepreneurial experience as it is described in the textbooks and as one group of people actually lived it. The second is that anyone who actually reads the books on this list in the order suggested is going to need a shot of dramatic escapism right about now.
Leadership Is an Art
BY Max De Pree
Every quarter, the officers and director-level managers of Herman Miller Inc., the office-furniture company, meet to review results, discuss plans, and examine ideas and directions. The meetings involve about 70 people. Shortly before one meeting, Max De Pree, the CEO and the son of Herman Miller's founder, received a thank-you letter from the mother of a handicapped employee. De Pree thought he should read it aloud at the meeting.
I almost got through this letter but could not finish. There I stood in front of this group of people--some of them pretty hard-driving--tongue-tied and embarrassed, unable to continue. At that point, one of our senior vice presidents, Joe Schwartz--urbane, elegant, mature--strode up the center aisle, put his arm around my shoulder, kissed me on the cheek, and adjourned the meeting.
If you were to start a company, can you imagine, under similar circumstances, a Joe Schwartz kissing you? "The signs of outstanding leadership," says De Pree, "appear primarily among the followers."
In his cover blurb for the paperback edition, Peter Drucker declares that De Pree's book "says more about leadership in clearer, more elegant, and more convincing language than many of the much longer books that have been published on the subject." Drucker, as usual, is right; and many people urged that this thin volume be included on this list.
It is, appropriately, last on the list--a fitting close to a series of works that began, in Player Piano, with Vonnegut's dramatization of the role of the human spirit in business. And it is appropriately last on a list drawn up for start-up entrepreneurs, because it provides one final prelaunch check of character and motives. "Beliefs," De Pree writes, "come before policies or standards or practices. Practice without belief is a forlorn existence. Managers who have no beliefs but only understand methodology and quantification are modern-day eunuchs."
- Player Piano, by Kurt Vonnegut Jr. (Laureleaf, 1997, $6.99)
- On Not Knowing How to Live, by Allen Wheelis (Harper & Row, 1975, out of print)
- Future Perfect, by Stan Davis (Addison-Wesley, 1997, $13)
- The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, by Michael E. Gerber (HarperBusiness, 1995, $15)
- The Practice of Management, by Peter F. Drucker (HarperBusiness, 1993, $17)
- New Venture Creation: Entrepreneurship for the 21st Century, by Jeffry A. Timmons (revised 4th edition, Irwin McGraw-Hill, 1994, $75.05)
- Startup: A Silicon Valley Adventure, by Jerry Kaplan (Penguin Books, 1994, $12.95)
- Leadership Is an Art, by Max De Pree (Dell, 1989, $12.95)
Finding the Books
Most of the books noted in this article can be found in a good library. If you want to buy them, especially those that are out of print, you might try the usual Web sites: www.amazon.com and www.barnesandnoble.com. Or try these three sites, where used and out-of-print books are available--and usually for less money than through the biggies above: www.bibliofind.com, www.alibris.com/, and www.bookfinder.com/ .