Josh Kaufmanns international bestseller, which “takes you on a worthwhile tour of the key ideas in business”, according to Seth Godin.

Even though many takeaways are methodical, I learned a lot while reading this book. I would recommend this book to everyone looking for a broad overview of what business is supposed to be like, or a starting point on how to learn about it.

I received this book as a birthday present together with Rich Dad Poor Dad and read it in late September and early October 2020. The recommendation for this book showed up many times, so I wanted to see for myself.


Content

Josh Kaufmanns goal with this the book is to provide solid fundamentals about how businesses work. He starts out with a top-level overview, and explores the following categories by dedicating a whole chapter to each:

  • Value Creation
  • Marketing
  • Sales
  • Value Delivery
  • Finance
  • The Human Mind
  • Working with Yourself
  • Working with Others
  • Understanding Systems
  • Analyzing Systems
  • Improving Systems

Each chapter contains a multitude of related concepts, each concept has its own section and can be understood as the description of a mental model of his providing a deeper understanding.


Review

I’m absolutely glad I read this book. My recommendation would be to not read it in concept-for-concept-order, but use it as a reference guide.

Main Takeaways

My biggest takeaway, by far, was the approach to split everything in mental models for better understanding. The book recommendations are a treasure chest, and ‘writing down goals first’ were other valuable takeaways.

Mental Models

Contrary to most other books, it did not have one big central theme that is explored in multiple facets. Instead, numerous small concepts are introduced.

This approach, to split everything apart in mental models, has been my biggest takeaway. I believe there is a lot of value to be gained by being much more explicit about the mental models we create and use.

Book Recommendations

While the book provided only very important concepts, it regularly recommended higher-quality books which go deeper. This alone is worth a lot, given enough time to follow them. For example, I got Financial Intelligence for Entrepreneurs soon after and read it starting in late October. You can read how I restructured my finances in my financial setup. The full list of recommended books can be found here.

Clarify your Goal

While this seems to be a recurring theme, it is sufficiently important to be one. Before you start reading something, you can significantly increase focus and retention by writing down one or two sentences about why you want to read the book, and what it is you want to learn by reading it. I did so for every book I have read since.

The same principle applies for any other (bigger) goal as well, and is exceedingly powerful when used.

Criticism

This is likely the most clearly structured book I have read so far. It’s absolutely easy to skim over and find parts that interest you. Introductions to each section are short and concise, and the provided definitions for each concept have clearly been thought about multiple times.

Long examples are rare, but present when providing significant advantage in understanding. Everything is further explained using short examples. Descriptions in general are exceptionally concise, and very much practically useful.

This is not a book with primarily actionable advice. It’s predominantly applyable, and usable advice.

Conclusion

Everyone with interest in what an MBA is supposed to provide can only gain from reading this book, knowledge-wise. I certainly understand why this book is seen as a ‘business-classic’.

Recommended for everyone who is looking for a broad overview of what business is supposed to be like, or a starting point on how to learn about it.

Favourite Quotes

Self-education is, I firmly believe, the only kind of education there is. - Isaac Asimov

Whoever best describes the problem is the one most likely to solve it. - Dan Roam (Back of the Napkin)

Beware of geeks bearing formulas. - Warren Buffet

A business is a repeatable process that makes money. Everything else is a Hobby. - Paul Freet, serial entrepreneur and commercialization expert

We have evolved to seek status, even just by signaling.

Changing the world is difficult, if you can’t pay the bills.

No business plan survives first contact with customers. - Steven Gary Blank

Things which matter most must never be at the mercy of things which matter least. - Johann Goethe

If you’re not embarrassed by the first version of your product, you’ve launched too late. - Read Hoffman, founder of LinkedIn

High-quality attention must be earned.

Being remarkable is the best way to attract attention.

If you think you’re being too obvious, you’re doing it right.

As a general rule, the only good use of debt or outside capital in setting up a system is to give you access to Force Multipliers you would not be able to access any other way.

Change the Reference Level, and your behavior will change automatically.

All you need to know is that something you want is possible, and you’ll find a way to get it.

Reinterpretation is possible because your memory is fundamentally impermanent.

Making the decision will always be your responsibility.

When you communicate the intent behind your plans, you allow the people you work with to intelligently respond to changes as they happen.

If your social circle is not supporting your goals, change your social circle.

… if there are more than seven or eight variables or dependencies, the cognitive scope limitation kicks in and confusion takes over.

… you can’t reliably optimize a system’s performance across multiple variables at once. Pick the most important one and focus your efforts accordingly.