Following up on last week’s post, I thought it could only be right to recommend my favorite reads. Of course I could mention some of the most influential business books such as The Art of War, The Prince or The Wealth of Nations, but I’d rather pick in a more modern department to recommend ones that are as insightful as they are enjoyable to read.
Five books that every entrepreneur should read
Blue Ocean Strategy
“Winning by not competing”, the Blue Ocean Strategy concept could sound so unfamiliar to all the old-school marketing addicts. But this international best seller upends traditional thinking with principles and tools to make the competition irrelevant. Yes, you read correctly: tools. The book is a fantastic toolbox of methodologies that will help you organize your thoughts and concentrate on what really matters.
While first published in 2005, the book’s message is still relevant. Blue Ocean Strategy is worth the time of anyone seeking to increase their success through innovation, whether it’s at the business strategy, product launch or simply marketing strategy level.
Principles of Marketing
In a fast-changing, increasingly digital and social marketplace, it’s more vital than ever for marketers to develop meaningful connections with their customers. Principles of Marketing helps readers master today’s key marketing challenge: to create vibrant, interactive communities of consumers who make products and brands an integral part of their daily lives. To help understand how to create value and build customer relationships, Kotler and Armstrong present fundamental marketing information within an innovative customer-value framework.
Change by Design
Need to reinvigorate your business? Think like a designer. In his book, Change By Design: How Design Thinking Transforms Organizations and Inspires Innovation, Tim Brown shows how using the traditional skills that designers develop, can be used to identify problems and create solutions in collaboration with the people who will benefit from the results. In other words, finding a solution to any business challenges is a creative process that should involve customers. What is not to agree with here?
Business Model Generation
Business Model Generation features powerful strategic tools and ideas to change up a business’s model and plan for whatever tomorrow brings. Whenever an organization needs to adapt to a new market, a strategy that is different than anything before is key. Acting as handbook for leaders and visionaries, the book strives to put a new spin on outdated business models.
The Lean Startup
Most startups fail. But many of those failures are preventable. The Lean Startup is a practical approach being adopted across the globe, changing the way companies are built and new products are launched.
By setting-up an engine of growth, building an adaptive organisation and lastly allowing sandbox for new ideas, Eric Ries shows in this book how it is possible to solve the main 21st century organisation problem: the tension between operational excellence and innovation; building, along the way, the economy of tomorrow.
Last month, I started telling you all about Effectuation with its first principle: “The Bird-in-hand principle“. But there is more to effectuation than a simple but innovative way to make dinner… Since that first post, I completed and passed the MOOC exam (yay me!) so I’m “officially” good to tell you more about this theory.
There are five principles to effectuation, each of which I will try to illustrate with one of my favorite entrepreneur’s story: Miss Gabrielle “Coco” Chanel. Today, let’s talk about the idea of affordable loss.
The Affordable Loss Principle
I’m sure you’ve heard before: “you need to love taking risks to become an entrepreneur”, or “I’m going to take a gamble but in five years, I will have tripled my revenues” (typical mistake made by many wanabee-entrepreneurs). There are two ways to look at risk taking:
The classic way:
Put it all on the table and focus on what the future (potentially) has in store for us. Make 5-years forecast income statements to feel better about what we’re investing.
The effectuation way:
Invest only what you can afford to loose. Don’t look into what you could be getting, but make sure that you’re not putting on the table more than what you would allow yourself to be losing. Live in the present and not in the future, in the real-life and not in Excel spreadsheets; and be smart about money.
Never buy new what can be bought second-hand. Never buy what you can lease. Never lease what you can rent. Never rent what you can borrow. Never borrow what you can salvage.
—Ian C. MacMillan, professor of entrepreneurship at Wharton’s Snider Entrepreneurial Center
The story to prove it
Still think you need to invest thousands of dollars to get started and start looking at what tomorrow would be like? Let me serve you a (very indulging) spoon of “romanced-reality” and take a couple of hours to watch Coco Before Chanel.
Because sometimes, it is unnecessary to understand where life is taking us. If you have one goal to set for the upcoming year think about this one:
Life isn’t about waiting for the storm to pass… It’s about learning to dance in the rain.
This is the last “Good Read” of 2013, maybe a book you will want to put on your list to Santa. And I’m going to be bluntly honest with you: I haven’t read the book… yet.
Why am I talking about a book I haven’t even read, will you ask (and you would be right to)… Because I have had the opportunity to work with one of his author, Philippe Silberzahn, and I have faith that content will be up to my expectations. Actually, I’m planning to bring it with me on my Christmas vacation (along with the 40 + copies I need to grade for January 6), and to dig into it, by the chimney, with a hot cup of tea.
Constructing Cassandra is subtitled “Reframing intelligence failure at the CIA, 1947-2001″… right there and then, you’re hooked. The book conducts an inquiry into the intelligence failures at the CIA that resulted in four key strategic surprises experienced by the U.S.: the Cuban Missile Crisis in 1962, the Iranian revolution of 1978, the collapse of the USSR in 1991, and the 9/11 terrorist attacks. Better than anything Hollywood can come up with, I’m already on the edge of my seat.
And if more convincing is needed, the customer reviews on Amazon are raving:
“It’s hard to overstate how useful this book is in explaining why the enormous resources the United States has put into intelligence gathering and analysis have so often yielded so little…”
“Milo Jones and Philippe Silberzahn have taken a much broader analysis to the known failures. They have uncovered important lessons not only worthwhile for the intelligence community but for anyone working or running larger organizations.”
Shall I say more? Maybe I will, after I read the book. Or even better, how about we organize a digital book club and you tell me what you think of the it?
Constructing Cassandra: Reframing Intelligence Failure at the CIA, 1947-2001 – Milo Jones, Philippe Silberzahn – Stanford Security Studies (August 21, 2013)
$795 at Saks Fifth Avenue
Lately I have been teaching entrepreneurship and marketing classes in two different schools to the same segment of audience: students looking to work in the luxury industry. Needless to say, I’m not a regular customer of that market, and although I understand how someone can shed $800 on a pair of Louboutin pumps (haven’t gotten there yet myself though), I was flabbergasted by some of the findings my students came up with.
We are doing market analysis and I asked them to estimate the acceptable price curve for their segment, and mostly, the price under which items in their segment would be considered “low quality”. Here’s an example of what they came up with:
Low quality average price for a bottle of champagne: 55€ ($74.5) on 20-30 years old target audience.
For the record, a bottle of Veuve Cliquot retails for 39€ in average in France mass-market ($50)
Low quality average price for a pair of sneakers: 50€ ($68) on a 16-65 years old target audience.
For the record, a pair of first-price sneakers in a French sport-specialized mass-market store: 14.95€ ($20)
Low quality average price for a “luxury watch”: 500+€ on a 35-55 years old target audience.
For the record a first-price Omega watch retails around 2,000€ ($2,800) in France; and they’re not the most expensive of watches…
This brings me to a question: in a world where luxury tends to be more and more accessible with some lower range products, does anyone has any idea of what the reality of the market is?
Recently I have learned and taught “Effectuation”: a logic of thinking, discovered through scientific research, used by expert entrepreneurs to build successful ventures. If you’re interested in learning more about Saras Sarasvathy research and what she has baptised Effectuation, you can digg into the great website/community that was put together around the concept.
I’m lucky to work with EM Lyon professor and author Philippe Silberzhan and to be following his MOOC (Massice Open Online Course) on the subject; so while I learn and practice I would love to introduce you to some of the Effectuation principles.
The Bird in Hand Principle
Let’s say you’re inviting some friends over for dinner. There are two ways to go about it.
The classic way:
- Decide on a menu
- Look into the fridge to see what’s already there
- Write a shopping list of what’s missing
The effectuation way:
- Look into the fridge to see what’s there
- Build the menu according to that
Same thing goes with entrepreneurship. You can either try to list all the things you’re missing to get started; or look into what you already have and see what you can do with that.
What do 100% of entrepreneurs have? Let me rephrase that: what do 100% of people have, whatever their gender, age, color or education?
- You have who you are.
- You have what you know.
- You have whom you know.
The story to prove it:
1907, a 23-years-old “cocotte” (kept woman), filled with determination, ambition and energy, named Gabrielle Chanel, find the hats worn by the women in her entourage to be atrociously vulgar.
She bought a number of basic hat forms made of straw or felt. Back at Royallieu, she decorated them minimally, often with little more than a ribbon around the crown, to which she might simply add a large hat pin…
… The shock was the idea, and this those unconventional female visitors to Royallieu were now keen to emulate.
Source: “Coco Chanel”, Lisa Chaney, Viking Penguin, 2011