6 Business Books for the Tech Person to Broaden their Horizons
Business books were not my usual genre. However, I had some time on my hands this December, and went from one amazing recommendation to another. What they all have in common is that they significantly changed the way I think about some aspect of work, or startups, or doing business. And reading them together, as a package, somehow makes them more impactful.
1. Designing Your Life
A few month ago, I decided I had not been completely satisfied with my job, and I wanted some change. Around the same time my best friend Nick was getting married, so I flew for the wedding to California. That was very fortunate: for a tech person, there’s no better place to deal with existential angst than the Bay Area. Pallen, Nick’s girlfriend and soon-to-be wife told me that she had just the right book for me: Designing Your Life, by Bill Burnett and Dave Evans. She had taken their class while she was in business school, and she thought it was great.
The basic premise of the book is that we can treat career planning like a product management problem. Our job may be one of the most important aspects of our life, so it is surprising how very often it is driven by what our 19-year-old selves and parents thought was a good idea, and pure chance. Instead, the authors propose to approach it in a disciplined and data driven way, testing hypotheses and course correcting on the way. This is a very ambitious goal (how do you put something as big as your career in a framework?), but the book actually delivers. The exercises were genuinely useful to me.
For example, they ask you to keep a journal of your work. You write down what you do, what is your level of engagement, how it affects your energy levels, and if you got into a flow state. After a few weeks you have actually data about what makes you happy or miserable at work. I thought that I knew what makes me tick, but with a few weeks of data I saw some patterns that didn’t expect at all.
The book emphasizes gathering data and testing hypotheses before committing. For example, let’s say that you want to quit your finance job to start a small, lovely cafe. Sounds cute, but how do you test if it’s right for you? First, you should talk with cafe owners about their work. You may be surprised — owning a cafe may turn out to be 90% about arguing with suppliers and hiring waiters. If you still like the idea after that, you should get a part-time job as a waiter or waitress — to see how the sausage is really made. That doesn’t sound exactly glamorous, but it beats investing your savings just to realize you hate what you spent them on.
Overall, this is an amazing book, and it applies similarly well if you are 20, 30, or 50 years old. I think everyone should read it.
It is quite different than the other books I describe in this post, but it has been pivotal for the process: without this book, I wouldn’t have read all the others.
Designing Your Life, by Bill Burnett and Dave Evans
2. eBoys
Every profession has their heroes, who might not be very well known outside. For startup people it would be Larry Page and Sergey Brin, for programmers Donald Knuth, for journalists Bob Woodward. For venture capitalists, as I learned, these are the founders of Benchmark Capital, and their story is described in eBoys by Randal E. Stross.
An upstart firm in the Golden Age of the Dot Com Boom, Benchmark strive to be different from their competition. Instead of a byzantine hierarchy of associates, managers, junior partners, partners, etc. they had the flattest structure possible — 5 equal partners, all sharing the profits equally from the firm’s deals. They went on to make some of the most successful investments in history (like eBay — thus the title of the book), but also the most epic screwups, like WebVan, the epitome of a Dot Com catastrophe.
It is also interesting how this book came to be. Venture capital firms tend to value their privacy a lot. Benchmark, always going against the grain, invited the author to spend 2 years in their office. He would hang out with them, listen to their conversations, but keep all editorial control over his book. The result is a masterpiece of the the “fly on the wall” genre. Of course, it’s never going to be the full picture. But even getting just a glimpse on the kind of conversations the partners were having is fantastic. The only drawback of this book is that it ends right before the dot com bust. Being able to see the eBoys also go through the toughest times would’ve made it even more amazing.
Another book by the same author which I’ve read but didn’t make the cut to review it is The Launch Pad, about Paul Graham’s Y Combinator. It’s not a bad book, but one of the best things about eBoys was that we got to know the heroes really closely. With a Y Combinator batch the dramatis personae is just way to large for this technique to work.
eBoys, by Randal E. Stross
3. Mr. China
I was very excited after reading eBoys, and telling everyone who’d listen how great it was. A venture capitalist friend told me “Oh, cool, I know a book you may enjoy as well, Mr. China. Check it out, I think its lessons are very much applicable to investing in Central Europe.” I quickly ordered it from Amazon (no Kindle version, d’oh!). This recommendation, delivered in a cheerful tone, was actually a lesson. eBoys tells you the story about these really nice and smart people, who may be struggling at times, but at least they are doing it in great company, having adventures. Mr. China is the perfect antidotum for this sort of romanticizing.
These days we think of China as THE world’s economic powerhouse. That was very much not the case when China had just opened for foreign business following Deng Xiaoping’s reforms in the early nineties. They were manufacturing antiquated, low quality products. In many cases they were still affected by the departure of the Soviet advisors following the Sino-Soviet split (they all left in a week, leaving half built factories and people with no know-how to run them—in the fifties). Management was not used to think about profit, most factories were crazily overstaffed. Nevertheless, it was a huge market and opportunity, and there were businessmen who wanted to bring China into the fold of the global economy — ideally, getting extremely rich in the process – becoming “Mr. China” or “an old China hand” (the author is British).
This book is the story of burning through a $418M fund — almost half a billion dollars, more than what was invested in WebVan! They tried their best, they spoke Chinese, yet they suffered a death from a thousand cuts. They were systematically outmaneuvered, outpaperworked, or just plain bamboozled. They had to deal with bureaucrats, ambitious local entrepreneurs/warlords, workers rioting, petty political wars. Any calamity you can think of — it happened. The book is an entertaining if very sad read, taking us from one crisis to another. One very memorable passages compares the expectations of their American board, used ot 6sigma processes, with the reality that their most sophisticated HR play had been… a big show of fireworks for the village surrounding their factory.
I appreciate that the author, regardless of his woes, never loses his sympathy and empathy towards the Chinese, and manages to keep a philosophical stance. He seems to think that they had it coming. Never fight a land war in China, as they say…
Mr. China, by Tim Clissold
4. Getting to Plan B
The Lean Startup is a great and popular book. When I was reading it, however, it seemed very focused on a startup heavily depending on the web. The startup I was working on at the time was about cancer diagnosis using Deep Learning, and I was struggling how to apply what I read to my situation.
Getting to Plan B has a similar theme of iteration and testing hypotheses, but it’s focused on business models instead of product. The main idea is that the pitched business idea (Plan A) is almost always very wrong, and that the most important process in a startup are the course corrections that get us to the real business. Nowadays most people call that a pivot but for this book it’s Plan B (or C, D, E…).
The authors state that there’s a lot of great business models out there, and that you shouldn’t invent them from scratch. Instead, look at existing companies, and then mix and match elements from their business models, and tune it till it works. It asks the entrepreneur to come up with Analogs and “Antilogs” (like a negative analog). These are businesses that we want to emulate (think of the common phrase “we are doing Uber for X”), or whose perceived failures we want to avoid. Next, identify what are your “leaps of faith” — untested assumptions on which your success depends. Our goal is to test those assumptions as effectively as possible.
The key parameters of a business model according to the authors are: (i) the revenue model, (ii) gross margins, (iii) operational costs, (iv) working capital, (v) investments. This may be trivial if you have a background in finance, but coming from a technical background I found this quite enlightening. Especially the part about working capital was interesting, as I had started to develop some intuitions about it at MicroscopeIT, but lacked the language to discuss it. One of the co-authors wrote another book devoted mostly to working capital: The Customer-Funded Business. It’s a good book, but it’s not as well written as Getting to Plan B, which was an incredibly pleasant read.
Getting to Plan B, by John Mullins and Randy Komisar
5. The Hard Thing About Hard Things
You know those extremely popular business books that would’ve been much better as an essay, yet end up as books because our society values books more? Well, this is not one of those. The Hard Thing About Hard Things by Ben Horowitz is amazing. If there was ever a manual for a startup founder, this is it. With the experience of being the co-founder and CTO of MicroscopeIT, going through the book I was constantly saying to myself things like “yup, he’s right,” “hm, that’s interesting, I wish I thought about that when I was in this situation,” or “oh wow, I had screwed up that time, and now I know why.” It’s just pure dynamite. And I am amazed by how he manages to keep every single chapter is both interesting and full of wisdom.
I am very tempted to say that I wish I had read this book before I started working at a startup. However, I am afraid that wouldn’t have helped. Some advice only starts making sense after you’ve lived a situation, and had to figure out a non-catastrophic solution with a lot at stake. So, I think that this book is read best after 9 months of trying to run a startup, or between projects.
The Hard Thing About Hard Things, by Ben Horowitz
6. Venture Deals
Receiving my first term sheet was a happy, but very uncomfortable moment. It was a complicated legal document which could have a huge impact on my life! It felt like I had to debug a complex program in a programming language I didn’t know, with the stakes being extremely high. I spent a lot of time googling, reading blogs, etc. and with time I managed to decipher most of the important clauses. It felt like coding through copy-and-pasting snippets from Stack Overflow, but with all the stuff going on around me there was no way I could dig deeper.
Now I decided it’s finally time to get a little more understanding, and Venture Deals by Brad Feld and Jason Mendelson is just what the doctor ordered. It goes through an example term sheet in quite a bit of detail. What I find valuable is that the authors point at what they think is really important in a term sheet, and what is almost safe to ignore (or at least, not worth fighting a war over). This isn’t exactly light reading, but I think that given the subject matter the authors did an outstanding job. For what is worth, I managed to go through the book in a day and a half without having to force myself too much.
Venture Deals, by Brad Feld and Jason Mendelson
What should I read next?
So, now you have some idea about the kind of books I enjoy. What should I read next?
For the recommendations, I am very grateful to Pallen Chiu, Tomasz Swieboda, and Piotr Kulesza.
