The best business books expand your thinking

Published in UT San Diego on October 9, 2012

“The business of business is business,” said the Nobel Prize-winning economist Milton Friedman. And selling books about business is one of those very big businesses. Giving business advice is a national pastime, and one needs to beware of the famous syndrome, “Those who can, do, and those who can’t, teach (or write books)” — and yours truly is guilty as charged on both counts.

While you may find some interesting information in books that offer seven principles on how to raise money or 10 ways to market your product, we believe the true value of great business books is in their ability to expand your thinking — to create a unique environment for intellectual wrestling — whether you own a bakery or a biotech.

Here are a few of our favorites.

• Two books by Daniel Kahneman top our list. “Choices, Values and Frames,” co-authored by Amos Tversky, tackles one of our favorite topics — the importance of rational behavior and how to embrace it. It expands on one of our favorite rules — No. 302: More money is lost through neurotic behavior than through bad business decisions. We also like Kahneman’s newest book, “Thinking, Fast and Slow,” which is a counterpoint to “Blink” by Malcolm Gladwell, a good book but not on our top list. In “Thinking, Fast and Slow,” Kahneman explores what he calls System 1 and System 2 thinking, and it has made us re-examine how we make decisions and whether we too often jump to conclusions.

• Originally published in 1991, “Crossing the Chasm” by Geoffrey Moore is still relevant today because marketing is often the area in which entrepreneurs run into problems. They build a “cool” product that they like but they have no idea whether it fills a customer need or how to persuade anyone to buy it. In “Crossing the Chasm,” Moore explores techniques on how to first attract innovators and early adopters and then move across the chasm to what he calls the early majority, late majority and laggards.

• “Steve Jobs” by Walter Isaacson is the best biography that we’ve read in the last five years. While none of us is Steve Jobs, we can learn a lot from the journey that he and Apple traveled. It is revealing to read how a man and a company changed not only an industry but an entire culture. We were intrigued by Jobs’ famous “reality distortion field” that allowed him to push the boundaries beyond what most people thought possible. Yet, this trait that made Jobs so successful in business may have cost him years off his life because he thought that he could “will” his disease away, rather than seek medical treatment.

• “The Black Swan” by Nassim Nicholas Taleb is Neil’s favorite and it puts into perspective Rule No. 217, “It’s what you don’t know that you don’t know that will kill you.” A “black swan” is an extremely unlikely event, positive or negative, that has major repercussions.

• “The Innovator’s Dilemma” by Clayton M. Christensen focuses on disruptive technology and why successful companies often lose their market leadership or go out of business completely when new technologies emerge. Think about what happened to horse and buggy manufacturers when automobiles came along, typewriter companies when personal computers came along or record retailers when iTunes came along. An entrepreneur has to continually address the environment, the competition and new technologies. Large companies often have a hard time jettisoning existing business lines — which of course creates an opportunity for the entrepreneur.

• We loved “The Secret Life of Houdini: The Making of America’s First Superhero” by William Kalush because Houdini was a master at reinventing himself over and over again — traits important in entrepreneurship. Also, entrepreneurship is a little bit like holding your breath under water. You don’t think that you can do it any longer, and then you find out that you can.

• Neil recommends “The Catcher in the Rye” by J.D. Salinger, which he first read in the 10th grade. He recalls, “The teacher was telling us what the book meant. I was sitting in the back of the class, and I told him that he had misinterpreted everything, that he had it all wrong. He asked me how I could be so sure. I told him that I knew he was wrong, because I was Holden Caulfield, whereupon, he tossed me out of the class. But I got the last laugh — I actually know where the ducks go in winter.”

Please let us know your favorites.

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