The Best Books for Business Owners, 2008

If your office is anything like Inc.'s, it's overflowing with business books covering topics ranging from marketing to innovation to customer psychology. To pick the best business books of the year for the entrepreneur, we turned to editor Leigh Buchanan, who writes Inc.'s monthly "Skimmer's Guide" book review; columnist Joel Spolsky, who is CEO and cofounder of Fog Creek Software in New York City; and Todd Sattersten and Jack Covert, the guys behind 800-CEO-READ, an influential blog that tracks new releases (800ceoread.com). Here are their top choices for 2008.

Here Comes Everybody: The Power of Organizing Without Organizations, by Clay Shirky (The Penguin Press).
Ever since the first e-mail user clicked "Reply All," the Internet has helped groups form and become powerful. In this book, NYU professor Shirky looks at how people use technology to find others like themselves, how they come to act in concert, and how this phenomenon will change society. Colorful examples range from the cool (Aegisub -- an online group of anime fans who subtitle Japanese cartoons for American audiences) to the stirring (a flash mob in Bulgaria that peacefully defied the president). We've read endless screeds about the Internet disrupting the traditional balance of power between governments and citizens, businesses and consumers. Yes, it's great that now everyone has a voice. But Shirky argues persuasively that the real action is in choirs.

Billion Dollar Lessons, by Paul B. Carroll and Chunka Mui (Portfolio).
Success is inspirational; disaster is educational. Billion Dollar Lessons offers an exhaustive curriculum on how not to run a company. The conclusions seem obvious: don't fall behind the technology curve, don't fall so deeply in love with innovation that you never consider practicality, don't lose sight of what business you are in. But consultants Carroll and Mui deftly place you in the moment of various corporate dramas, so it's easy to understand, for example, why Motorola's leadership swooned over Iridium. This is a great book for decision-makers anxious to eliminate their own vulnerabilities.

Why Popcorn Costs So Much at the Movies, and Other Pricing Puzzles, by Richard B. McKenzie (Springer-Verlag).
Written by an economist for smart people, Popcorn unpacks pricing puzzles taken from real life, from the age-old debate over ending a price in a 9 to charging $10 for a bucket of movie theater popcorn. McKenzie never trivializes or condescends, and he steers clear of making controversial statements just for the sake of publicity. Best of all, he is scrupulous about exploring multiple theories for each issue raised, avoiding the mistake, made by so many writers, of telling only those anecdotes that support the book's main thesis. To an entrepreneur facing the mystery of setting prices, this book contains a wealth of important ideas.

The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By, by Scott A. Shane (Yale Press).
The decision to start a company is personal and emotional. Every entrepreneur's experience feels like a uniquely challenging and promising quest. Leave it to an academic to number-crunch the stars from our eyes. Drawing on an arsenal of data, Case Western professor Shane systematically reality checks every aspect of the start-up process: how long it takes, how big you'll grow, the chances of getting financing, and whether you'll make it at all. Yet he is also generous with advice on where real opportunities lie, and reveals common errors (for example, choosing a business with low barriers to entry) so readers can avoid them. Illusions is an important book for anyone considering starting a company, and an important one to conceal from family members urging them not to do it.

The Game-Changer by A.G. Lafley and Ram Charan (Crown).
Institutionalized innovation is not an oxymoron. Entrepreneurs love to think they're more creative than the big guys, but even latter-day Thomas Edisons are no match for the invention machine that is Procter & Gamble. P&G CEO A.G. Lafley and consultant-to-the-business-stars Ram Charan take readers inside the focus groups, customer immersion programs, incentive strategies, and idea fairs that have brought us everything from disposable diapers to cling wrap that actually clings. They also explain the company's careful balance between home-growing ideas and plucking them from others' trees. Only a handful of P&G's practices scale for small companies, but readers will be motivated to create systems of their own.

The Back of the Napkin: Solving Problems and Selling Ideas with Pictures by Dan Roam (Portfolio).
A number of books have offered readers advice on different ways to use pictures, drawings, and charts to communicate complex ideas -- among them, Presentation Zen by Garr Reynolds, Slideology by Nancy Duarte, and the light-hearted Indexed by Jessica Hagy. This book, written by the founder and CEO of a Bay Area consulting firm called Digital Roam, rises above the crowd by treating visual thinking as a serious subject for managers. Roam's "Visual Thinking Codex" on page 141 -- a chart of doodles that helps you express the various stages of problem solving -- is the book's coup de grâce.

A Sense of Urgency by John P. Kotter (Harvard Business Press).
This sequel to the 1997 bestseller Leading Change looks at how companies -- and the individuals within them -- should determine which tasks are truly important and which are merely customary. The book's message is especially compelling in these stomach-churning economic times, as it points distressed businesses towards some healthy and productive ways to set priorities and maximize performance.

Tribes by Seth Godin (Portfolio).
The slim, 147-page volume is Godin's best book since Purple Cow -- and maybe his best book period. Through good old-fashioned storytelling, the author and Squidoo founder explains to leaders how they can rally groups of like-minded people around common interests, feelings, and ideas. The topic of how a company should interact with its community of followers -- only some of whom may actually be paying customers -- is a rich one, and we suspect you'll be seeing a lot of more of this approach in the years to come. Plus, Inc.'s Joel Spolsky gets a nice shout-out on the very first page.

The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up by Norm Brodsky and Bo Burlingham (Portfolio).
Our very own dynamic duo distills the wisdom they've developed over the course of 15 years of friendship and collaboration into this smart, polished book. Brodsky, who recently sold his Brooklyn-based business, CitiStorage, for $110 million, shares not only valuable insights into running a company; his ability to reflect on each experience he has and derive meaning from it is, in itself, inspiring and a model for all entrepreneurs. And nobody can explain seemingly complex business concepts -- or write sentences that include advanced accounting -- with as much grace and style as Burlingham.