The Personal MBA
Josh Kaufman
Summary
This book will teach you everything you learn in MBA school with real world examples. It will also tell you that an MBA is not a significant degree.
However, doing an MBA is an interesting topic I’ve thought a lot about because although the knowledge is nothing special (you’ll find a lot of it below), it can give you value in other ways (network, career reset, etc.)
Rating: 4/5
Notes
Large companies move slowly
Climbing the corporate ladder is an obstacle to doing great work
Key is to recognize patterns and build mental models
Business is value creation, customer demand, transactions, value delivery and profit sufficiency/finance
There’s nothing more valuable than an unmet need that becomes fixable
Drive to acquire, drive to bond, drive to learn, drive to defend and drive to feel
10 ways to evaluate a market:
- Urgency
- Market size
- Pricing potential
- Cost of customer acquisition
- Cost of value delivery
- Uniqueness of the offer
- Speed to market
- Up front investment
- Upsell potential
- Evergreen potential
Rank all out of 10: If under 50 points then pass, if over 75 then go for it
Learn from the competition to create more value
Every iteration of a business has 6 steps:
- Watch
- Ideate
- Guess
- Which change
- Act
- Measure
Give people offering feedback the chance to pre-order
9 values to consider when making a purchase:
- Efficiency
- Speed
- Reliability
- Ease of use
- Flexibility
- Status
- Aesthetic appeal
- Emotion
- Cost
Know the critically important assumptions
Need to create a prototype/MEVO (minimum economically viable offer) and shadow test it before scaling
Market your offer to be remarkable
Know your probable purchaser
Best way to market is education based selling
Framing: emphasize important things and de-emphasize the things that’ aren’t
Coming up with a good hook is very important (emphasize value)
Testimonials are very effective, tell a story
Understand value comparison when pricing
Know your value when pricing a product
Education based selling is worth it to make your customer more informed
Have alternatives and know when to walk away from a bad deal
3 stages of negotiation (make sure to prepare in advance):
- Setup
- Structure: understand framing the proposal for the other party
- Discussion
Don’t give anyone control over decisions affecting your money
Providing free value builds your social capital (reciprocity)
Providing a damaging admission about an offer not being perfect increases trust
Use social proof and referrals to get people to buy
If selling to customers, use risk-reversal (if don’t like, 100% money back guarentee)
Reactivation is easier than acquiring new customers
Understand your value stream from raw materials to customers (maximize for efficiency)
Think about value delivery: giving customers an unexpected surprise
Measure your throughput: rate at which the system delivers to a goal
Scaling is multiplying/duplicating to increase value quickly
The better the systems, the better the business
Create as much value as possible, then capture it to keep the business operating
Understand sufficiency: minimum value to keep the business operating while you can enjoy and afford your life and employees
4 ways to increase revenue:
- Increase customers
- Increase average size of transaction by selling more
- Increase frequency of transaction
- Raise prices
Understand lifetime value of a customer
To get allowable acquisition cost: (lifetime value – value stream costs – overhead) x (1 – profit margin)
Know the breakeven point
Calculating time value of money: dollar today is worth more than tomorrow
Leverage maximizes potential for gains and losses
ROI is return on investment
Sunk costs are important to consider: cut your losses if they can’t be recouped
The environment dictates which actions your brain takes to get perception under control
Change the reference level and your behaviour will change
All you need to know is something you want is possible and you’ll find a way to get it
Change the structure of your environment and your behaviour will change
Loss aversion: people hate to lose things more than they like to gain them
If you can target people’s loss aversion (money back guarentee), you’ll be more successful
If firing people, do it all at once, not incrementally
Personalizing an issue is a way to hack your brains limitation of not processing information (make the layoff like one of your parents)
Cultivate the right associations
Contrast is making a decision based on the surrounding environment
Use scarcity when selling a product: forces people into making a decisions
Eliminate distractions and conflicts before starting to work
Goals are most useful is framed in positive, immediate, concrete and specific format
Focus on installing one habit at a time
When making a decision, always ask ‘which experience do I want to have’
Read books and evidence that directly challenges your view
Every job has its tradeoffs so learn about them early
Invest in a personal R&D budget (5% of your monthly income)
Utilize comparative advantage: diversity in a team will make you more successful
Make other people feel important
Always remember to treat people with appreciation, courtesy and respect
Add social proof to what you’re selling and your sales will increase
Influence your customers into small commitments and they’ll be more likely to buy
Focus on options, not issues and people will trust you
Figure out the selection test: environmental constraint which keeps business alive
Eliminate unnecessary dependencies
Think about second order effects: the indirect consequences
Complex systems will fail so always be ready
Deconstruct complex systems into subsystems and analyze those
Understand your system’s KPI: key performance indicator
Be honest with yourself about data and have a 3rd party look at it
Think about the confidence interval of your data: bigger sample size = better
Segment customers based on past perforrmance, demographics and psychographics
Pareto 80:20 principle: 20% of something owns/does 80% of the other thing
Know your diminishing returns
Work on removing friction in the business
Have standard operating procedures in place for when something happens
Consider doing nothing when something happens
Well designed fail safes should be in place in case the primary system fails
Never stop constantly experimenting
***
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How the World Works
Noam Chomsky
Summary
A combination of books Chomsky wrote in the 80s and 90s about America and it's role in the world. Fascinating read and insight into one of the great thinkers of the 21st century
Rating: 5/5
Notes
The US invaded Greece in 1947 and supported a horrendous war which led to 160k Greek deaths. This was the model for Vietnam and allowed American business to gain and thrive
US policies in the 3rd world consistently opposed democracies if they couldn’t be controlled as real democracies believe government should respond to the needs of their own population rather than those of US investors
US-run contra forces in the 3rd world isn’t ordering killing - it’s brutal sadistic torture (Nicaragua, El Salvador, Guatemala)
From the Bolshevik revolution in 1917 till the collapse of the communist governments in eastern europe in the 80s, it was possible to justify every US attack as defense against the Soviets
If you want a global system that’s subordinated to the needs of US investors, you can’t let pieces of it wander off. It’s clearly stated in the documents of record
The US wants ‘stability’ meaning security for the upper classes and large foreign businesses
Solid case for impeaching every American president since World War 2 either outright as war criminals or involved in serious war crimes
El Salvador and Nicaragua were not covered by the US media in the 70s when US-supported brutal torture and murder were taking place
In the early 80s, America’s friends slaughtered 10s of thousands of Guatemalans with countless others tortured and raped
After Vietnam, the major US policy goal has been to maximize repression and suffering of countries demonstrated by their violence - blocked other countries from seeking aid
The US regularly carries out or supports aggression
For most of the 20th century, the US was the dominant economic power and used economic warfare as a weapon ranging from illegal embargoes to enforcement of weak IMF rules with their military becoming pre-eminent
The US tries to avoid negotiations with countries as the US fears it will lose and other countries will be better off
When a state has huge debts, it must divert the population from what’s happening and they do this by inspiring fear of our enemies (Russia in Europe)
The real enemy of the US has always been ‘the poor who seek to plunder the rich’. In America, it’s the opposite and has been for generations
‘The war on drugs’ was a manufactured media blitz by the US leadership to distract the population, increase repression in inner cities and build support for attack on civil liberties
The US government blocks international effort to seek peace (Russia and Ukraine)
Major media are large companies owned and interlinked with even larger conglomerates. The market is the advertisers and the product is audiences
The power in the US lies in the hands of people who determine investment decisions as they determine production, distribution and staff the government. They want a passive, quiescent population
The struggle of freedom is never over and requires active and sustained efforts
One important consequence of globalization is it extends the third world model to industrial nations where the average person has their jobs shipped away while the rich and elite continue to amass massive amounts of wealth
We’ve moved to an international state with the IMF, World Bank, G7 & EU, WEF where the general population doesn’t know what’s happening and it doesn’t know it doesn’t know
If the borrowing the US has done was used for constructive purposes like investment or infrastructure, the US would be better off, but it was used to enrich the rich - for consumption, financial manipulation and speculation which are all harmful
The class warfare of the last few decades has successfully weakened popular organizations leaving people to feel isolated
The US is so deeply in debt to the international financial community because of debt that they have a lock on US policy
Many of the large number of security council resolutions vetoed by the US have to do with Israeli aggression or atrocities
Invaders typically use local collaborators to run things for them by playing upon existing rivalries to get onne group to work for them against another
European wars were wars of extermination. If we were to be honest about history, we would simply describe it as barbarian invasion
There has always been racism but it developed as a leading principle of thought in the context of colonialism.
A standard technique of belief formation goes along with oppression
In the US, you’re not allowed to talk about the class differences, which is the real issue
When the US establishment talks about jobs, it means profits for its corporations
The elite are masters and they follow what Adam Smith said about ‘the vile maxim’ - all for ourselves and nothing for anyone else
People who aren’t owners and investors have nothing much to say in the US
Jefferson warned against banking institutions and corporations and said if they grow, aristocrats would’ve won and the revolution would’ve been lost
The ‘Free market’ is for the poor. We have a dual system - protection for the rich and market discipline for everyone else
There’s been a considerable increase in inequality and has the American society moving towards a third world model, thereby seeing increased crime and signs of social disintegration
A huge area of the media is dedicated to diverting people and making them more stupid and passive
There’s nothing individualistic about corporations who are totalitarian in nature
Free trade agreements result in reduced wages for local employees while predominantly benefiting the rich consumer while also destroying unions
Operation Paper Clip imported large number of known Nazi criminals
The American army’s counter-insurgency literature begins with an analysis of the German experience in Europe written with the co-operation of Naxi officials (instruments of statecraft - book)
US involvement in Chile with the coup in 1973 to reduce social democracy
The threat of a good empire is what the US worried about with reforms on uncontrolled capitalism
The US killed a few million people and destoryed 3 countries during the Vietnam war
A huge amount of business propaganda is to create wants
The answers to solve all these issues is to organize. Being alone you can’t do anything but if you join with other people, you can make changes
Under capitalism, investment is supposed to be as risk free as possible. No competition wants free markets - what they want is power
The government subsidizes corporations’ costs, protects them from market risks and lets them keep the profits
There’s never been much difference between the 2 business parties and the differences are disappearing
The CIA has been involved in drug running for generations (the politics of heroin book)
You need something to frighten people with, to prevent them from paying attention to what’s really happening to them. You have to engender fear and hatred
The first world lives in a highly indoctrinated society
Neoliberalism is nothing more than the imperial formula: free markets for you and plenty of protection for me. The rich would never accept it but they’re happy to impose it on the poor
The UN does mostly what US business wants
‘Politics is the shadow cast on society by big business’ - John Devery
If people dedicate themselves to organizing and activism, we’ll gain access to broader audiences
If you extrapolate to the future, it’s very ugly but the point is it’s not inevitable. It can be changed but we can’t change things till we understand them.
***
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