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11 Vital Books for First-Time Entrepreneurs

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From 2011 to 2013, I read 197 books. I read about history, physics, science, health, world travel, space exploration, the ocean, fitness and mathematics. I read bestsellers, classics and unknown authors. However, the underlying foundation of my reading was rooted in startups and entrepreneurship (not simply because I build startups, but because I have a sincere passion for it).

Here are 11 books I recommend for all first-time entrepreneurs (and really any entrepreneur for that matter), not in any order.

1. The Lean Startup by Eric Ries


This book is still a must read, even though the Lean Startup movement is not as radiant as it was from 2011 to 2013. Based in principles taught by Steve Blank in Four Steps to the Epiphany, Ries provides any entrepreneur (or intrapreneur) the framework and practical science behind testing ideas.

The whole premise of the book is to view startups as science experiments, by testing and analyzing everything you do, to help you save money and time to ensure your idea has some sort of demand. Read it if you haven’t.

2. Rework by Jason Fried


Jason Fried is a diabolical genius. In my mind, he’s like this mad scientist that sits up in a tower overlooking the world, and watches as the world does everything wrong, while he sits back and plays a game of chess. He’s the godfather of going against the grain and disrupting the status quo.

This book will help you unravel the societal norms engrained into us at an early age, and uplift you to become better entrepreneurs by thinking outside the box.

3. The Tipping Point by Malcolm Gladwell


In The Tipping Point, Malcolm Gladwell attempts to uncover the “mysterious sociological behaviors” that shape everyday life. Gladwell explains a tipping point as “the moment of critical mass, the threshold, the boiling point,” and says “ideas and products and messages and behaviors spread like viruses do.”

He gives historical examples and substantiates his theories with facts, while breaking down his examples through invisible forces that only a world-renown sociologist can. He explains the reason that hush puppies became so popular in the mid 1990s and the reason behind steep decline in New York City’s crime rate after 1990.

To simply learn about how these invisible forces can create unintended results helped me to be more conscious about life and business. All of Gladwell’s books encourage me to think deeply, and empower me to see the world through a different lens, which results in new perspective. These new perspectives help me view my own entrepreneurial journey differently, which I greatly value.

4. The Innovator’s Dilemma by Clayton Christensen


Disruption. We’ve all heard the term. Christensen was the one who brought it to life.

Here’s the synopsis: “First published in 1997, Christensen’s book suggests that successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models that will meet their customers’ unstated or future needs. He argues that such companies will eventually fall behind. Christensen calls the anticipation of future needs ‘disruptive innovation,’ and gives examples involving the personal computer industry, milkshakes, and steel minimills.”

Pairing this book with The Lean Startup helped me realize how important testing and validating assumptions is for not just startups, but for established companies as well. The innovator’s “dilemma” comes from the concept that companies will dismiss new market innovation based on the fact that customers do not currently use them, which then leaves the market ripe for disruption. Clayton gives historical examples that makes the concept easily digestible and helps drive home the lessons.

5. Crossing the Chasm by Geoffery A. Moore


Immediately after reading this book I thought I understood everything about building a company. This book teaches you why you may have had early “traction,” but how and why that traction does not guarantee mass market success. He does this by breaking down early adoption cycles, and shows the difference in your product lifecycle.

The chasm he refers to is between early adopters and the mass market. Simply looking at the cover will help you understand the concept. This book helped me understand the hockey stick curve growth model and other vital startup lessons. If you read the Lean Startup beforehand, Moore’s lessons will help you understand “product-market fit” as Ries discusses so frequently in his book.

6. Launch! by Scott Duffy


This book acts as a practical manual for breathing life into your idea. Duffy walks through examples and entertaining stories along the way, as well as provides a basic framework to follow through his years of business (which includes selling his last company to Richard Branson and the Virgin Group). Entertaining and useful, this book lives up to its allure, and displays the value and expertise of Duffy as a businessman, mentor and human.

7. Hackers & Painters: Big Ideas From the Computer Age by Paul Graham


Paul Graham is the man behind Y Combinator, the Harvard of tech accelerators, and Graham has an uncanny ability to see into the future. This book gives a glimpse into Paul’s unique thinking and draws on historical examples. He takes us on a journey of what he calls “an intellectual Wild West,” where anyone with an idea can take a shot.

8. The 7 Habits of Highly Effective People by Steven Covey


This book is highly effective for helping anyone to prioritize and stay organized and on task. My big takeaway from this book was the Urgent/Important prioritization matrix. As entrepreneurs, being able to intelligently prioritize becomes a vital skill. You can learn this skill and many more through Covey’s classic.

9. The 4-Hour Work Week by Tim Ferriss


The 4-Hour Work Week has become an instant classic for any entrepreneur. Tim Ferriss treats his life as a big experiment. In this book, he teaches us how to live the life we want now, through real world case studies and practical examples. He explains that the “New Rich” figure out how to outsource, delegate and eliminate half of your work and other cool life/work hacks.

10. The 50th Law by Robert Greene and 50 Cent


Robert Greene is the man behind the 33 Strategies of War, The 48 Laws of Power and other classics. Teaming up with 50 Cent, they have written the manuscript for business and life success, which can be summed up as one mantra: “Fear nothing.” The book walks us through real life examples of 50 Cent’s life, and how he overcame personal and business adversity. It provides a message of hope and encouragement.

Bonus: Moonwalking with Einstein: The Art & Science of Remembering Everything by Joshua Foer


This is not a business book. However, it’s one of my favorites that I’ve read in the past five years. Joshua Foer is a journalist who started covering memory competitions. He got so enthralled by his work, that he took on the challenge of becoming a memory athlete himself.

Filled with rich journalism, he provides us deep insight into the tricks and strategies used by these “mental athletes,” while he walks us through his personal journey of preparation for the United States Memory Championship. The book is riveting and entertaining beyond belief, and as Foer says, “in every way that matters, we are the sum of our memories.”

 

source: http://www.entrepreneur.com/

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Business

THE US ECONOMY IS SUFFERING FROM LOW DEMAND

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We have concluded that demand matters for productivity growth and that increasing demand is key to restarting growth across advanced economies, write James Manyika, Jaana Remes, and Jan Mischke in Harvard Business Review.

A little over a century ago, Henry Ford doubled the minimum pay of his workers to $5 a day. When other employers followed suit, it became clear that Ford had sparked a chain reaction. Higher pay throughout the industry helped lead to more sales, creating a virtuous cycle of growth and prosperity. Could we be at another Henry Ford moment?

Some major companies have announced plans to boost employee pay. Target raised its minimum wage to $11 this past fall and committed to $15 by 2020. More recently, Walmart announced plans to match that increase to $11. In banking, Wells Fargo and Fifth Third Bancorp also announced pay increases for minimum wage employees.

These pay increases have occurred against a backdrop of weak economic growth and rising income inequality. Economic growth has been stuck in low gear for almost a decade now, averaging around 2% a year since 2010 while productivity growth, the key to increasing living standards, has been languishing near historic lows since the financial crisis. But more recently there has been a glimmer of hope. After stagnating for years, wages have begun picking up slightly, as has productivity growth, while corporate profits remain near record highs.

Are these recent wage increases merely necessary in light of a tightening labor market, or could they start a broader trend that may change our economic growth trajectory?

After a year-long analysis of seven developed countries and six sectors, we have concluded that demand matters for productivity growth and that increasing demand is key to restarting growth across advanced economies.

The impact of demand on productivity growth is often underappreciated. Looking closer at the period following the financial crisis, 2010 to 2014, we find that weak demand played a key role in the recent productivity growth decline to historic lows. In fact, about half of the slowdown in productivity growth — from an average of 2.4% in the United States and Western Europe in 2000 to 2004 to 0.5% a decade later — was due to weak demand and uncertainty.

For example, in the mid-1990s to the mid-2000s, rising consumer purchasing power boosted productivity growth in both the retail and the auto sector, by encouraging a shift to higher-value goods that can be supplied at higher productivity levels. In the auto sector, as customers in the early 2000s purchased higher value-added SUVs and premium vehicles in both the United States and Germany, they spurred incremental productivity growth of 0.4 to 0.5 percentage points. Today, that trend has slowed slightly in both countries, contributing only 0.3 percentage points to productivity growth in the period 2010 to 2014.

Similarly, in retail, we estimate that consumers shifting to higher-value goods, for example higher-value wines or premium yogurts, contributed 45% to the 1995-2000 retail productivity acceleration in the United States. This subsequently waned, dragging down productivity growth.

To put it simply, when consumers have more to spend, they buy more sophisticated things. That’s good not just for consumers and producers, but for the overall economy, because making more sophisticated, higher-value things makes everyone involve more productive, and therefore helps increase overall standards of living.

In addition, we found two other ways weak demand hurt productivity growth in the aftermath of the financial crisis: a reduction in economies of scale and weak investment.

First, the economies of scale effect. In finance, productivity growth declined particularly in the United States, United Kingdom, and Spain due to contractions in lending volumes that banks were unable to fully offset with staff cuts due to the need for fixed labor (for example to support branch networks and IT infrastructure or to deal with existing loans and bad debt). The utilities sector, which has seen flattening demand growth due to both energy efficiency policies as well as a decline in economic activity during the crisis, was similarly not able to downsize labor due to the need for labor to support electricity distribution and the grid infrastructure, and here, too, productivity growth fell.

Second, the effect of weak investment. We have found from our global surveys of businesses that almost half of companies that are increasing their investment budgets are doing so because of an increase in demand. Demand is the single most important factor driving corporate investment decisions. Investment, in turn, is critical for productivity growth, as it equips workers with more – and with more recent and innovative – equipment, software, and structures. But we have seen capital intensity growth fall to the lowest levels in post-WWII history. Weaker demand leads to weaker investment and creates a vicious cycle for productivity and income growth.

Of course, the financial crisis is long since over, and the economy has recovered, at least by some measures. So what’s to worry about? Won’t demand return to pre-recession levels, and thereby increase productivity?

Unfortunately, there is reason to believe that some of the drags on demand for goods and services may be more structural than crises-related. Slowing population growth means less rapid expansion of the pool of consumers. And rising income inequality is shifting purchasing power from those most likely to spend to those more likely to save. This is reflected in slowing growth expectations in many markets. For example, across our sectors and countries studied, in the decade from 1995 to 2004, growth in demand for goods and services averaged 4.6%, slowed to 2.3% in 2010 to 2014, and is forecast to slightly increase to 2.8% in 2014 to 2020.

Today, there is concern about where the next wave of growth will come from. Some prominent economists worry that we may be stuck in a vicious cycle of economic underperformance for some time. Our analyses strongly suggest that supporting sustained demand growth needs to be part of the answer. Demand may deserve attention to help boost productivity growth not only during the recovery from the financial crisis but also in terms of longer-term structural leakages and their impact on productivity. Suitable tools for this longer-term situation include: focusing on productive investment as a fiscal priority, growing the purchasing power of low-income consumers with the highest propensity to consume, unlocking private business and residential investment, and supporting worker training and transition programs to ensure that periods of transition do not disrupt incomes.

Companies play a key role in promoting growth through investment and innovation as well as supporting their workforce through training programs. Yet companies may also want to consider the words of Ford when he said: “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.” While this is certainly not true for individual companies, it is true for the broader economy, and we might be at a rare point where the representatives of employees and employers alike share a common interest in healthy wage growth.

 

 

 

 

Source:  Harvard Business Review.

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AUTOMATION WILL MAKE LIFELONG LEARNING A NECESSARY PART OF WORK

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Shifts in skills are not new: we have seen such a shift from physical to cognitive tasks, and more recently to digital skills. But the coming shift in workforce skills could be massive in scale, write Jacques Bughin, Susan Lund, and Eric Hazin in Harvard Business Review.

President Emmanuel Macron together with many Silicon Valley CEOs will kick off the VivaTech conference in Paris this week with the aim of showcasing the “good” side of technology. Our research highlights some of those benefits, especially the productivity growth and performance gains that automation and artificial intelligence can bring to the economy — and to society more broadly, if these technologies are used to tackle major issues such as fighting disease and tackling climate change. But we also note some critical challenges that need to be overcome. Foremost among them: a massive shift in the skills that we will need in the workplace in the future.

To see just how big those shifts could be, our latest research analyzed skill requirements for individual work activities in more than 800 occupations to examine the number of hours that the workforce spends on 25 core skills today. We then estimated the extent to which these skill requirements could change by 2030, as automation and artificial technologies are deployed in the workplace, and backed up our findings with a detailed survey of more than 3,000 business leaders in seven countries, who largely confirmed our quantitative findings. We grouped the 25 skills into five categories: physical and manual (which is the largest category today), basic cognitive, higher cognitive, social and emotional, and technological skills (today’s smallest category).

The findings highlight the major challenge confronting our workforces, our economies, and the well-being of our societies. Among other priorities, they show the urgency of putting in place large-scale retraining initiatives for a majority of workers who will be affected by automation — initiatives that are sorely lacking today.

Shifts in skills are not new: we have seen such a shift from physical to cognitive tasks, and more recently to digital skills. But the coming shift in workforce skills could be massive in scale. To give a sense of magnitude: more than one in three workers may need to adapt their skills’ mix by 2030, which is more than double the number who could be displaced by automation under some of our adoption scenarios — and lifelong learning of new skills will be essential for all. With the advent of AI, basic cognitive skills, such as reading and basic numeracy, will not suffice for many jobs, while demand for advanced technological skills, such as coding and programming, will rise, by 55% in 2030, according to our analysis.

The need for social and emotional skills including initiative taking and leadership will also rise sharply, by 24%, and among higher cognitive skills, creativity and complex information and problem solving will also become significantly more important. These are often seen as “soft” skills that schools and education systems in general are not set up to impart. Yet in a more automated future, when machines are capable of taking on many more rote tasks, these skills will become increasingly important — precisely because machines are still far from able to provide expertise and coaching, or manage complex relationships.

While many people fear that automation will reduce the number of jobs for humans, we note that the diffusion of AI will take time. The need for basic cognitive skills as well as physical and manual skills will not disappear. In fact, physical and manual skills will remain the largest skill category in many countries by hours worked, but with different importance across countries. In France and the United Kingdom, for example, manual skills will be overtaken by demand for social and emotional skills, while in Germany, higher cognitive skills will become preeminent. These country differences are the result of different industry mixes in each country, which in turn affect the automation potential of economies and the future skills mix. While we based our estimates on the automation potential of sectors and countries today, this could change depending on the pace and enthusiasm with which AI is adopted in companies, sectors, and countries. Already, it is clear that China is moving rapidly to become a leading AI player, and Asia as a whole is ahead of Europe in the volume of AI investment.

We see retraining (or “reskilling” as some like to call it), as the imperative of the coming decade. It is a challenge not just for companies, which are on the front lines, but also for educational institutions, industry and labor groups, philanthropists, and of course, policy makers, who will need to find new ways to incentivize investments in human capital.

For companies, these shifts are part of the larger automation challenge that will require a thorough rethink of how work is organized within firms — including what the strategic workforce needs are likely to be, and how to set about achieving them. In our research, we find some examples of companies that are focusing on retraining, either in-house — for example, Germany’s SAP — or by working with outside educational institutions, as AT&T is doing. Overall, our survey suggests that European firms are more likely to fill future staffing needs in the new automation era by focusing on retraining, while US firms are more open to new hiring. The starting point for all of this will be a mindset change, with companies seeking to measure future success by their ability to provide continuous learning options to employees.

The skill shift is not only a challenge, it is an opportunity. If companies and societies are able to equip workers with the new skills that are needed, the upside will be considerable, in terms of higher productivity growth, rising wages, and increased prosperity. M. Macron’s point about technology being a force for good will become a self-fulfilling prophecy. Conversely, a failure to address these shifting skill demands could exacerbate income polarization and stoke political and social tensions. The stakes are high, but we can already see the outlines of what needs to be done — and we have a little time to work on solutions.

 

 

 

Source: Harvard Business Review

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Business

WHY AI ISN’T THE DEATH OF JOBS

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Companies using AI to innovate are more likely to increase employment, writes Jacques Bughin in MIT Sloan Management Review.

When pundits talk about the impact that artificial intelligence (AI) will have on the labor market, the outlook is usually bleak, with the loss of many jobs to machines as the dominant theme. But that’s just part of the story — a probable outcome for companies that use AI only to increase efficiency. As it turns out, companies using AI to also drive innovation are more likely to increase head count than reduce it.

That’s what my colleagues and I recently learned through the McKinsey Global Institute’s broad-based research initiative aimed at understanding the spread of AI in economies, sectors, and companies.1 We polled 20,000 AI-aware C-level executives in 10 countries to compile a sample of more than 3,000 companies (mostly large), identified distinct clusters within that pool, and ran a variety of scenarios on those clusters to project the effects of AI on employment, revenue, and profitability.

This research and analysis suggest that although AI will probably lead to less overall full-time-equivalent employment by 2030, it won’t inevitably lead to massive unemployment. One major reason for this prediction is because early, innovation-focused adopters are positioning themselves for growth, which tends to stimulate employment. (See “How AI-Based Innovations Drive Employment.”)

Here’s how we expect things to play out in the five clusters of companies we examined.

Enthusiastic innovators, or pioneering companies that make early investments in AI and embrace the disruption it can create in the quest for advantage, adopt a full range of AI technologies and use them to bolster innovation and efficiency. These companies are analogous to what sociologist and communication theorist Everett Rogers called “early adopters” back when he coined the term — they’re intrinsically motivated to use new technology to shape and open markets.2 While this approach is potentially complex in the short term, our analysis shows that by 2030, the profitability of enthusiastic innovators will grow 8% faster than that of the average company on an annual basis, their revenue will grow 4% faster, and their head count will rise 2.2% faster.

Source: MIT Sloan Management

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