The best books for startup founders and CEOs
Published in Productivity, Startups.
When I sold my SaaS startup, I wrote about the three things I would do differently if I did it again. Reading more books was number one.
I used to read a lot when I was younger but at some point between starting my company in 2009 and selling it in 2018, I stopped reading books. I still read articles, blog posts and but it was books that somehow disappeared.
In my final year as CEO, I set up a book club with my executive team. As a result, we engaged better as a group, debated ideas and implemented many valuable changes. This is because books allow for depth. Ideas can be explored, stories told and concepts explained in more depth than short articles. I wish I had restarted reading books sooner.
Since 2017, I challenged myself to read more. Initially aiming for quantity to get back into the habit, that goal has changed to aim for quality.
This post looks at why startup founders and CEOs should read, what to read and how to find it. At the end I list my top 10 books for startup founders, 4 of which are nothing to do with startups.
Why should startup founders read?
Startup time runs faster than real-time. There are too many things to do, so much that reading feels like a luxury. But the pressure to execute meant I sacrificed a big part of learning how. The key word is: learning.
I find that I do not remember specifics of most of the books I read. Over time I even forget whether I have read a particular book. However, the concepts remain. They build on each other. I might not remember where I read about an idea but the important things come back at the right time.
I prefer reading non-fiction in eBook format because I highlight key passages and store them in a searchable notebook. A “quote of the day” script I wrote picks a random highlight from my Kindle and emails it to me (Readwise is a paid service which does the same). The Kindle Paperwhite is better than an iPad or phone because it has fewer options for distraction. It is too easy to flip open a browser on an iPad or get notifications on a phone.
Finding time to read is difficult. I read for at least an hour before bed but that is fiction to help me get to sleep. For non-fiction, when I was CEO I would block an hour in my calendar each day to sit quietly and read. If you do not set aside specific time you will find it difficult to get large enough blocks of time to focus. Travel time and audiobooks help to make the most of available time but I consider dedicated reading time an essential part of my daily routine.
Successful founders must be focused and filter out distractions but this prevents discovering new ideas. Unlike articles, blog posts, Twitter and forums, books also require focus. Some books are too long and many should just be articles, but a book is still the best way to go into depth on a topic.
The rapid pace of change is what makes startups so difficult. In an established business, you hire an experienced specialist in each role. In a startup, the roles change every 12-18 months. What is working now will soon break. Teams either continuously reinvent themselves or they fail.
When hiring executives, look for people who have the experience and background that would make them a good fit or hire for the next 12–18 months. Anything shorter than that and they will not be able to scale sufficiently far relative to the time it takes to hire them. Anything longer and you will over-hire and end up with someone who is a bad fit for the job.Elad Gil, High Growth Handbook.
Without learning about the ideas, successes and failures of others, a startup founder will make unnecessary mistakes or execute sub-optimally. This is “just in time” learning: reading about a problem you are about to face, or currently facing, helps with solving acute issues.
Startup books are useful for exploring these specific issues, but they are not the only thing startup founders and CEOs should read.
What should startup founders read?
The best way to learn about business is to run one. Startup and business books are useful if you have a specific problem. However, just like doing an MBA, most business books are a waste of time.
Startup founders must operate under a high degree of uncertainty. The way to make decisions in situations with imperfect information is through the application of first principles. This means reading about history, science and philosophy.
There are no “correct” books to read. There are too many to choose from, so pick something you think you will find interesting. Avoid reading what might seem “useful” or what everyone is talking about. New books come out all the time, constantly pulling for your attention.
I’m susceptible to fear of missing out (FOMO) when it comes to new and popular books. I’ve always found refuge in books, but being wedded to the identity of “the well-read guy” can breed keeping-up-with-the-Joneses consumption. Taking new books off the table for 2020, in a sense, also takes that type of FOMO off the table. I can’t compulsively scratch the itch of new, so I’m better able to calmly use other criteria.Tim Ferriss, Why I’m Reading No New Books in 2020.
I try to go for variety. Looking through the recent updates on my Goodreads feed, the last few books were on economic history (2007), a history of ancient Rome (2015), a history of the lead up to World War I (1962), Japanese philosophy (1340) and startup culture (2019). Diversity of topic, publication date and author.
History is particularly important. Understanding what has happened in the past is crucial to understanding the present and predicting the future. Most of the reading I have been doing around understanding the coronavirus pandemic has drawn on historical precedent. What happened in the last financial crisis and the last pandemic? What does this mean we should do now?
How to find the best books to read
If I expect to read 20 books in a year and my life expectancy is 85 that means I only have ~1,000 books left. That sounds like a lot but in 2011 184,000 books were published in the UK. There’s no time for bad books!
My favourite way to discover new books is based on what other people have read and recommend. Goodreads can be useful if your friends use it. I also like to hear about the book recommendations of public figures I admire.
- Bill Gates is famous for his reviews and uses reading as a way to explore a wide range of deep, technical topics.
- Marc Andreessen seems to approach reading like Bill Gates, but is less public about it. Someone made a historical list of books tweeted and he still occasionally tweets recommendations.
- References in other books, whether specifically mentioned in-text or referenced in the notes or bibliography.
- Podcasts are often used as part of promoting new releases but guests will often mention other books. Tim Ferriss usually asks his podcast guests about their favourite books, so search the list if someone you like has been on his podcast.
The 10 best books for startup founders and CEOs
In 2017, I started using Goodreads to rate all the books I read. I publish an annual list of the books I rate 5 stars and you can find a list of all my book ratings here.
Here are the top 10 books I recommend to startup founders and CEOs:
For understanding the world
This is the most important category. If you don’t read any other books then at least consider these.
- The Ascent of Money: A Financial History of the World, Niall Ferguson
Economic history is important to understand the system we all rely on. This book examines how money has developed and how complicated the monetary has become. The economy has cycles. Eventually you will experience a recession and whilst each one is different from the last, understanding what makes cycles happen helps to get through to the other side. Some of the best businesses have been created during downturns how do you stay calm in a cycle of doom? Understanding financial history puts everything into perspective because we have been here before.
- The Lessons of History, Will Durant & Ariel Durant
A lot of stuff has happened in the past! This is a very short book that takes you through key periods and extracts the lessons everyone needs to know. It is very high level and has a frustrating lack of references, but you can use it as a stepping stone to look into the areas you are interested in researching next.
- The Limits to Growth, Donella H. Meadows
Although out of date, this book does an amazing job at explaining the unintuitive concept of exponential growth. It explains the massive environmental challenges we face and how technology and productivity work together. This is particularly relevant for those in the tech industry.
- Why Nations Fail: The Origins of Power, Prosperity and Poverty, Daron Acemoğlu & James A. Robinson
A case study approach to comparing different countries. What are the real differences between successful and failed states? If the answer is geography, why the difference between Mexico and USA? If the answer is common history then why North and South Korea? If the answer is the inevitable effects of colonialism, why Botswana vs Zimbabwe?
For creating ideas
- Competing Against Luck: The Story of Innovation and Customer Choice, Clayton M. Christensen
The Job to be Done framework is one of many tools for evaluating startup business ideas. Although this book is wordy and fails to provide a simple step-by-step framework, the theory is still useful to understand what differentiates successful and failed startups.
- Zero to One: Notes on Start Ups, or How to Build the Future, Peter Thiel & Blake Masters
If you have ambitions to found a venture backed business that solves a massive problem, this is the best guide to thinking through those ideas. It inspires as well as helping to critically evaluate whether your idea will fit the criteria of an investable business. We have too many “Uber for x” and “pet social network” startups. More founders should read this and solve some difficult problems.
- Rework, Jason Fried & David Heinemeier Hansson
The exact opposite of Zero to One. There is no right approach, but you must decide which one you wish to pursue. The idea of a “lifestyle business” has unfortunately become a derogatory term, but it is really just a choice about how you want to live. Generating a significant profit is a choice that can enable many other things. Some businesses are impossible without huge sums of money. Understand both, pick one.
For new founders and the inexperienced
- The Effective Executive, Peter Drucker
The majority of this book seems like common sense, but only after you have spent 5-10 years trying to figure it out for yourself! For startup founders (or their direct reports) focused on delivery, this is a good primer. I don’t agree with everything, for example he thinks that meetings are a waste of time which is only true if they are not structured properly (see below). I also disagree that you have to put up with horrible people. With the abundance of amazing places to work, employees should quit to find better cultures, and founders should quickly fire anyone who is toxic.
- The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, Ben Horowitz
This also fits in the “for running a startup” category below but I think it is just as useful for new founders to read. It reveals the true challenges you are about to face as well as offering practical advice for many common situations.
For running a startup
- The Five Dysfunctions of a Team: A Leadership Fable, Patrick Lencioni
Culture is important but how do you actually create one that allows teams to function at their best? To be read alongside Death by Meeting, this is the book that had the most impact on how I ran my company. As CEO, it transformed how I ran my executive team and influenced how I ran the team I led once we were acquired by StackPath (300 people and generating $200m in annual revenue).