Simple. If you are an aspiring entrepreneur with limited capital, you must know where to invest your time and resources.
You can’t afford many mistakes, so you don’t burn your cash for no reason. You have to know what you are doing and why. That’s where most cookie-cutter business books fail you.
Here’s something about these books. Most of them are trash. They are designed to hook you instead of helping you with your aspirations. And when you read the wrong books at the wrong time:
- You are left with unrealistic expectations
- You find yourself chasing fake motivation
- And you end up relying on well-packaged fallacies
They even top it all by trying to sell you webinars and mastermind courses. They want to keep you broke, so you become a returning customer.
As Naval Ravikant sees it:
There’s so much junk out there. Right? There are as many kinds of authors as there are people. So there are lots and lots of people who are going to write lots of junk.
And as a beginner, you better keep yourself away from these junks. The superficial you-can-do-it narrative might look innocent, but it can sabotage your growth as an entrepreneur.
Allow me to quote Ravikant once more.
If you start out reading a set of things that are false or weakly true at best, they form the axioms or the foundation of your worldview. Then when the new things come in, you judge them whether they are accurate or not based on that foundation.
Slight business errors add up fast, snowballing into severe financial disasters.
So if you want to prevent them, you need to build a solid core. Also, being well versed with how things (really) work can help you make the right calls to maximize your winning chances.
Four Essential Books for Aspiring Entrepreneurs
Here are some books for aspiring entrepreneurs that have helped me see the market for what it is instead of what I would like it to be. It has been a liberating and rewarding experience ever since.
Want to feel it yourself? Here you go.
1. The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
by Eric Ries
Goodreads Score: 4.11/5
The big question of our time is not Can it be built? but Should it be built?― Eric Ries, The Lean Startup
Working hard doesn’t pay off unless you are working on the right things.
You knew it already. Right? So how do you know if a business idea is worth the work? Do you rely on your instincts, or do you study a focus group for market research?
While both have their places, there is another more effective method to sense the market interest.
Before getting into the method itself, let’s be clear about why you can’t win by following a traditional business strategy.
Usually, a company runs market research, creates a solid framework around it, and delivers the product at a mass scale. However, there are three reasons why you can’t do that:
- The process is too expensive.
- If the product doesn’t work, you lose both money and time.
- Market research is more about audience opinion and less about audience behavior. Saying that they will buy a product is an opinion. The act of buying it is the behavior. There’s always a gap.
So the best (and most cost-effective) way to test your ideas is to deploy the minimum viable product plan. In this method, you make a minimal early version of the product and test it on a small group of potential customers.
Not only does it help you bypass lengthy tasks (those would be unnecessary at this point), but you also get an accurate representation of the market behavior.
For example, suppose you want to test a new kind of shaver with some unique features.
Now, instead of going all-in from the get-go, you are better off making a dozen of test models and listing them online.
You can also create online ads for your target audience and run them for a few months. That’s how you can accurately track whether or not there’s a market for your product by the number of sales you make.
In this book from the co-founder of IMVU, you will get a step-by-step guide on building a perfect MVP framework and how to create a product the market craves for.
2. Competing Against Luck: The Story of Innovation and Customer Choice
by Clayton M. Christensen
Goodreads Score: 4.12/5
For innovators, understanding the job is to understand what consumers care most about in that moment of trying to make progress.― Clayton M. Christensen, Competing Against Luck
So now we know how to differentiate a promising idea from an unfavorable one. But how do you come up with an idea? How to detect what your customers need? Isn’t it all up to luck?
Most startups seem to think so. They assume the market’s needs, bring the product, and try different ways to pull customers. Then they hope for the best.
But hope isn’t a good business strategy. So when the customers don’t show up, they double down on marketing and sales. Then, within a few years, they fail.
I know I shouldn’t, but I’m going to quote Naval one last time anyway:
You’re doing sales because you failed at marketing. You’re doing marketing because you failed at product.
Always remember. Customers don’t buy drills. They buy the holes. Author & Harvard professor Clayton M. Christensen echoes the same wisdom in this book.
According to him, people don’t fail to innovate the right products because they are dumb. They fail because they are asking the wrong question.
Instead of asking, “how do I sell this product?” they should ask, “what job will my product get done for my customers?”
As an entrepreneur with a limited budget, this little difference can make or break you. I highly recommend this book to get a clear and practical starting point.
3. Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine
by Mike Michalowicz
Goodreads Score: 4.26/5
We assume that multimillion-dollar companies are turning big profits, but it’s rare to find a truly profitable business.― Mike Michalowicz, Profit First
It might sound counter-intuitive, but not every shiny company with solid branding and business all over the world makes money.
Uber is one of the companies that is infamous for prioritizing growth over profitability. As a result, even in Nov 2021, it was losing money despite a 72% hike in revenue.
Sure, new companies backed by venture capitalists often favor expansion over lucrative returns, just like Amazon did in its early years. However, at this point, Uber was more than a decade old.
Another silicon valley darling and poster boy of the DTC business model, Casper, had been losing money every year since its inception. Even after earning roughly 50% profit margin for every mattress they sold.
Make no mistake. The temptation to reinvest everything you earn for the sake of the company’s growth is pretty strong. But it’s not always a wise call. Not when your livelihood depends on it.
Your sales can dip. But your expenses don’t.
That’s why any aspiring entrepreneur should be deliberate with their finance and set aside some profit from day one.
In Mike Michalowicz’s words:
A financially healthy company is a result of a series of small daily financial wins, not one big moment. Profitability isn’t an event; it’s a habit.
That’s what this book offers you. A functional to book your profit from every single sale you make. The best part is that you can do it and still grow your business at the same time.
4. The Personal MBA: Master the Art of Business
by Josh Kaufman
Goodreads Score: 4.09/5
Every time your customers purchase from you, they’re deciding that they value what you have to offer more than they value anything else their money could buy at that moment.― Josh Kaufman, The Personal MBA: Master the Art of Business
If you don’t have the time or only want to read one book, I recommend this one. In this book, the author, Josh Kaufman, covers the five elements of a successful business step-by-step.
#1 Element: Value creation
#2 Element: Marketing
#3 Element: Sales
#4 Element: Value delivery
#5 Element: Finance
Fail at any one of these elements, and you lose money.
- If your venture doesn’t provide any value to the market, it’s nothing but a glorified hobby.
- If you create a killer product and fail to market it effectively, it will fly under the radar.
- When you aren’t making enough sales, there’s no revenue.
- If your product isn’t providing your customer the value it promised, your business becomes a scam.
- And lastly, when you fail to make more money than you spend, you lose the battle.
For more in-depth insights, you know what to do.
Pulling off a successful startup is significantly more challenging than writing down your wishes in a dream journal. But it’s not impossible. Once you have the right tools, your winning probability increases exponentially. That’s exactly what you get from these books here.