This is the fourteenth book in the series Learning Together and Leading Together where we are going through the Personal MBA plan curated by Josh Kaufman. Our goal is to get through 99 books this year. Do we read the whole book? Nope. We digest the summary(s) of the book and I give my thoughts and you give your thoughts. Feel free to follow along and comment if you would like.
The best summary I found on this book was found here by Nathalie Lussier.
Major point of this book are:
Four Stages of development are common to all entrepreneurial business. What is an entrepreneurial business? An entrepreneurial business is one that creates its own products, does its own marketing, and determines its own path.
There are four stages describe in the book:
- Infancy: This involves taking your business from an idea to actively generating reasonable cash flows. This stage takes you from zero to $1 million in annual revenue.
- Childhood: This involves taking your business from $1 million, where there is generally little or no profit, to $10 million in sales, at which point you can expect between $1 million and $2 million a year in profit.
- Adolescence: This stage takes your business over $10 million threshold to revenues of upto $50 million and annual profits of between $2 million and $5 million.
- Adulthood: At this stage, your business is free to grow to the $100 million level, which is the goal. At this point, there is nothing stopping the business from growing beyond that as well.
Each of these four stages has its own unique characteristics, problems, challenges, and opportunities:
- In the stage one infancy, the main problem is that you won’t really know what you’re doing yet. The main challenge is making the first profitable sale. The main opportunity is achieving the minimum critical mass of customers.
- In stage two, childhood, the main problem is that you are only breaking even and may even be losing money. The main challenge is to create many additional profitable products quickly. The main opportunity is to increase cash flow and become profitable.
- By the time you reach stage three, adolescence, the main problem is going to be that your systems are strained by growth, and your customers are noticing. Your main challenge is turning what looks like chaos into order. Your main opportunity will be learning how to establish useful protocols and manage processes and procedures.
- At stage four, adulthood, your main problem will be that sales begin to slow down or even stall.
The main challenge will be challenging your company so that it is entrepreneurial once again. And your main opportunity will be in getting the business to run itself so that you can work where, when and how you want to.
Have I taken a company to $100 million dollars? Nope. Do I want to? You better believe it! Why? Besides the fact that I hope one day to give away $1 million to a complete stranger but because it is about continuing to learn and grow as a leader.
I found myself asking a lot of questions during reviewing the principles of this book. Most of the questions were about myself and my leadership style and capabilities. Knowing which stage your company is in is the biggest challenge of this book. The biggest application of this book is knowing which stage you are in as a leader.
Book summaries of this book where a little lacking so please go out and get the book.
If you need a copy of the book go here: [amazon_enhanced asin=”0470182024″ /]
What did you think of this book? Are you ready to start a lean startup?