Media is obsessed with startups; every day we hear about charismatic entrepreneurs, revolutionary technologies and fantastic unicorns backed by super-smart and bold VC-s. Yet, in reality, the startup ecosystem is tiny. In 2017, various US investment funds had over $38 Trln. worth of assets under their management, but only $359 Bln. (less than 1%) belonged to venture funds. Similarly, there were over 28 Mln. active businesses in the US in 2017, but only about 400 of them had venture exits. Tech startups, such as Uber, simply receive disproportionally high attention from journalists and bloggers, which often makes us forget that more than 99% of the economy still consists of traditional brick-and-mortar businesses, and what is happening in venture industry is a unique and unusual phenomenon. The dynamics of venture economy is radically different from the remaining 99% of the business world, and the “rules of the game” of startup industry often contradict those of traditional economy; you need to know these rules very well to play the startup game right.
In addition to the fact that the rules of the startup world are unique, they are also changing fast. Since 2009, I have been occasionally teaching international entrepreneurs on how to launch a startup in Silicon Valley (or to relocate an existing one here). Starting off as a small 4-hour seminar, it eventually grew into a 4-day workshop, each day spanning from 9 AM to 9 PM. From the very beginning, the Power Point presentation for my lectures had a slide “Books You Must Read.” I had a recurrent message for my audience: “if you forget everything which I am teaching you and remember just one slide, you should remember this one.” Funnily enough, none of the books listed in the original 2009 version of the slide made it to the 2019 version. In fact, the same holds true even for the 2011 version. This is a testament on how fast everything is changing in the startup/VC world.
The startup economy has unique rules and they are changing fast.
If you are thinking about launching your first startup, pause for a moment and take your time to learn these rules. Below is a list of 10+1 books that summarizes the critical minimum of what you should know. Spend a couple of months going through this list, and only then come back to your startup idea. You might be tempted to jump into the action right now, but it would be anything but wise. You learn DMV’s “Laws of the Road” handbook by heart before starting to drive your first car; similarly, you must learn Silicon Valley’s rules and playbooks before starting to build your first startup.
One final point before we get to the books. Are you going to have co-founders in your company? If yes, make sure they also read all the books from the following list, so as to ensure both you and they will speak the same “startup language”:
- Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel and Blake Masters, 2014: 223 pages, 4 hours and 50 minutes on Audible.
- Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies by Reid Hoffman and Chris Yeh, 2018: 318 pages, 9 hours on Audible.
- The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz 2014: 308 pages, 8 hours on Audible.
- How to be The Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs by Tim Draper, 2018: 365 pages, 9 hours and 11 minutes on Audible.
- The Four Steps to the Epiphany by Steve Blank, 2013: 380 pages, no Audible version.
- The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries, 2011: 8 hours and 38 minutes on Audible.
- Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Pigneur, 2010: 288 pages, no Audible version.
- Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson, 2016: 305 pages, 6 hours and 35 minutes on Audible.
- Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups by David S. Rose, 2014: 305 pages, 6 hours and 42 minutes on Audible.
- The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies by Mahendra Ramsinghani, 2014: 397 pages, no Audible version.
- The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki, 2015: 338 pages, 8 hours and 43 minutes on Audible.
Do you see some books in this list which you have not read yet? Do not waste time, pick one right away and start reading. Do not have a lot of time to read? Use Audible to listen while driving or exercising.
Good luck and may the venture force be with you!
P.S. Books ## 9 and 10 target investors, not entrepreneurs. However, they are extremely valuable for startup founders. I explain why in another post.