Top 6 books for the first year of your start-up journey
What you should read and the order you should read it in.
People often say that the learning curve you take while working in a start-up is the equivalent of drinking from a fire-hose. While good start-uppers are thirsty for knowledge, it can be easy to get lost in all the information available today. In the year that I’ve been running Style Counsel, I have gone through hundreds of sources of information, but not everything has been useful. Below is a reading list of 6 books I recommend for the first year of an entrepreneurial journey and the order they should be read in.
To give you some context, I started Style Counsel while at Chicago Booth last year. In our first year of company life we were coached in the New Venture Challenge (#4 US accelerator), raised our first round of funding, launched a product, got users and were featured in Inc, Cosmopolitan and Huffington Post. There was also stress, incredibly hard work, team tension and more mistakes than I can count. While start-up life is risky and stressful, you can mitigate some of that by getting advice from the pros through their books.
This should be the book you read right at the start of the journey. It is less of a “how to” but answers questions that you are either wondering about or, should be wondering about when you are considering launching a company. For example, should you go it alone or have co-founders? When is the right time in your career to launch a start-up? How do you split equity among the team?
I read this while at business school and was considering whether I should take a full-time job in an established company like Facebook or launch Style Counsel. This gave me a good internal framework and let me make the decision with confidence. Miraculously, once you believe you’ve made the right decision, execution of it gets easier.
This book is important for every area of life, because to live well, we must negotiate. It is even more important for start-up founders, because you are negotiating almost all day every day. You have no brand, no money, and no proof of concept, yet you have to convince smart people to give you money, join your team and work for nothing. You also have to do this in an honourable way, so influence is really your only tool.
For me, a top takeaway from this book was the importance of social proof from people we identify with. The human brain hates uncertainty and takes shortcuts to make decisions. A classic shortcut when faced with an unfamiliar situation is to do what people similar to us are doing. So, if you’re negotiating with someone, find a way to show that people similar to that person have already put trust in you. At the start, when we had nothing, the backgrounds of the team (Facebook, Groupon, WPP) and our Chicago Booth origin was all the social proof we had, so I squeezed every possible benefit from these associations. Alumni of your school or employer can be a great place to start with, because you already have an unifying identifier with them.
Absolute must read if you are setting up a platform company, or if the product you are developing will be sold to platform businesses (e.g. if you have a SaaS product which you intend to sell to the likes of Amazon). If you are setting up a platform, this is a great guide with case studies from the early stages of the tech behemoths we know today.
I use a lot of this book in my work at Style Counsel. For example, our idea to split affiliate revenue with fashion bloggers on our platform came directly from the case study of how YouTube split advertising revenue with its first creators to help it kick-start the network effect. Here is my full review of this book for start-ups and the YouTube series I’m doing on platform lessons for start-ups.
This book applies the Business Model Canvas, skilfully developed by Alex Osterwalder, to young technology companies. I read this at the start of our journey and still go back to the first chapter to keep re-working Style Counsel’s Lean Canvas. This is a good framework for what your business actually is and goes beyond the product. Entrepreneurs often get so fixated on the product that they forget about the rest of the business model, or don’t have one at all. Running Lean helps you connect the product and business into one, so you can tell a coherent story.
Here is the canvas to whet your appetite:
I also loved the testing and analytics chapters, which you should be reading when you have a product or a prototype. It is a good introduction to a topic which you should become obsessed with when your product launches.
Whatever company you are creating, don’t pour money into making a product and then hope people like it. Instead, build a realistic prototype and test it among a target audience. The Sprint method, developed by Google Ventures, is a great way to create an initial prototype and test your main assumptions.
We did two sprints with Ribot, an award-winning design firm that works with firms like Google and Tesco. The ideas from these sprints form the core of our product today. Having a tested prototype made a big difference in our fundraising and confidence: we could show potential investors what we were planning to build, and we felt more confident as a team that our target users wanted us to build the product we were working on. Here’s a full review I did of Sprint last year.
Written by Ben Horowitz, this is great book for the start-up CEO with a refreshingly honest account of how difficult running a company is and an admission that “if CEOs were graded on a 100 scale, the average would be 22”.
I read this at the end of year one, which is exactly what I needed. One year in, you know enough about how difficult and risky your job is to appreciate Ben’s lessons, but you are still early enough in your journey that you can adapt.
I got two main lessons from this book. Firstly, as the CEO of the company, you are solely responsible for your sanity and if you lose it, the company will cease to exist. You must do whatever it takes to preserve your rationality and health when you are under immense pressure, so you can make quality decisions quickly. Secondly, all start-ups are inherently chaotic. Lack of time, money and knowledge are a defining characteristic for all start-ups, but most business practices and books have been written about mature companies with a set order. Beware of taking advice from people who have never worked in a start-up environment, even if they have an excellent background of corporate career and Ivy League success.
This is not a beautifully written book, but the lessons are so valuable that you stop noticing, or you can just read Hemingway afterwards to detox.
If you have any tips you would like to share on what start-uppers should be reading, please comment here or on Twitter Sophia Matveeva