Book Review- "My Personal MBA" By Josh Kaufman

Name- My Personal MBA

Author- Josh Kaufman

About Author

Josh Kaufman is the bestselling author of books on business, entrepreneurship, skill acquisition, productivity, creativity, applied psychology, and practical wisdom. Josh's research focuses on business, entrepreneurship, skill acquisition, productivity, creativity, applied psychology, and practical wisdom. His unique, multidisciplinary approach to business mastery and rapid skill acquisition has helped millions of readers around the world learn essential concepts and skills on their own terms.

Josh has been featured as the #1 bestselling author in Business & Money, as ranked by Amazon.com, and his books have sold over a million copies worldwide.

Book Review

When Josh Kaufman was a senior in college, he accepted a job offer at Procter & Gamble to be an assistant brand manager in his new position. He'd be working alongside people who had MBA degrees from top universities. Josh didn't have an MBA and he couldn't justify going back to school to get an MBA and putting himself in over $100,000 in debt.

So he wondered if there was a way that he could master the fundamentals of business without getting an MBA. When he researched top business people that didn't have an MBA he came across a brilliant business investor named Charlie Munger. Charlie Munger is the business partner of Warren Buffett and together they developed the company, Berkshire Hathaway, into a four hundred billion dollar business.

According to Buffett Charlie can analyze and evaluate any kind of deal faster and more accurately than any man alive Munger doesn't have a formal business education he's a meteorologist and a lawyer from Omaha. Everything he knows about the business he taught himself Munger says that he's able to understand business and make important business decisions by using a latticework of mental models and fundamental business frameworks that he uses to outsmart the competition.

Josh got inspired by Munger and he started reading hundreds of business books in search of the right mental models. He could use to outsmart and outperform his MBA colleagues as Josh read book after book he started seeing reoccurring patterns and he discovered that at the heart of every business is a five-part:

Value creation
Marketing
Sales
Value delivery
Finance

Josh says that without any one of these parts you don't have a business a venture that doesn't create value for others. A venture that doesn't have proper marketing is a flop a venture that doesn't sell the value it creates is a non-profit a venture that doesn't deliver what it promises is a scam and a venture that doesn't bring in enough money to keep operating will inevitably close.

So let's explore each part so that we can become Better to analyze a business and make better business decisions as an employee of a business or an entrepreneur trying to start a business.

1. Value Creation

Are we creating something people will pay for? The first thing to understand when building a successful business is understanding what drives people to buy a product or service in the first place. In the book, trade-off why some things catch on and others don't Kevin mani identifies two primary characteristics that drive buying decisions convenience and high fidelity convenience means quick reliable easy and flexible people pay a premium for convenience.

This is why companies like cart a company that does the grocery shopping for you exist in the marketplace. People could drive to the grocery store and pick up their groceries but they choose to spend an additional $10 to have their groceries picked up and delivered to them.

An example, of high fidelity, is Apple computers people pay a premium for Apple computers because they love the way it makes them feel and they love that it shows other people that they value. However, you can make a product or service that makes life easier for people or make them feel special. But there's still no guarantee they'll pay you for it.

An example of this is the Segway a product that cost over a hundred million dollars to develop. The people that built the Segway were sure that this device would revolutionize personal transportation in the same way that the car replaced the horse and buggy. But when they finally release the Segway less than 10 per cent of their expected customer base bought the Segway.

It was a very well-designed and functional product but the market simply didn't want it. Therefore rather than going into hiding for a year and making something that you think people will value. It's much better to build an early version of a product and measure your customer’s response to it. From that point, you can make incremental improvements to your product until it's good enough for people to be willing to pay for it.

2. Marketing

We need to ask ourselves here how well are we attracted to and holding our customer’s attention. When Apple launched the original iPod they told the world that this device would be one thousand songs in your pocket. This statement of this idea was remarkable and it violated people's expectations it made people pause and take notice of the new product in the book.

The purple cow author Seth Godin uses a wonderful metaphor to illustrate this marketing principle let's say you're driving down the highway and you see a field full of brown cows that are ordinary and boring. But if you suddenly saw a purple cow it would be remarkable, it would violate your expectations and it would hold your attention. Any business that can have a purple cow effect has a great chance of getting customers.

3. Sales

How well do our customers believe and trust us? If a stranger walked up to you at a bus stop and offered you twenty dollars in exchange for ten dollars. You probably wouldn't make the trade because it seems too good to be true, and you don't believe or trust them enough to make the deal.

And the same goes for salespeople who aren't willing to give up their hard-earned money unless they believe and trust a business can deliver on its promise one way to quickly build up belief and Trust is to get social proof. A business is unable to build up social proof it simply needs to perform consistently and be around long enough for people to trust it the more trust a business has the more sales the business makes.

4. Value delivery

Are we exceeding the customers as spectators? 10 years ago if you were to buy shoes online at zappos.com you would have received a pleasant surprise. The shoes you ordered would have shown up the next day unexpectedly. Zappos didn't advertise free expedited shipping because they knew that the surprise that would come from exceeding your expectations would be far more valuable.

Customer expectations have to be high enough for the customer to purchase in the first place but after the purchase is made the performance of the offering must surpass expectations. If you want the customer to be satisfied come back and buy from you again and recommend the business to their friends, one way to exceed customer expectations is to build highly efficient systems that deliver high-quality products in a fast and reliable manner Like Zappos did with her one-day shipping.

Another way is to have exceptional customer service. There's a story of a customer service rep at Zappos who noticed that a customer ordered a pair of shoes that were out of stock so the customer service rep went to a rival store purchased the shoes and deliver them to the customer now that's exceptional service.

5. Finance

Are you making more money than we're spending? if not, you need to reduce spending in one of the four parts mentioned previously or produce something of greater perceived value. Josh says it's not more complicated than that yes there can be fancy models and jargon.

But ultimately you're simply using numbers to decide whether or not your business is operating the way you intended. Being a great business mind is not about knowing all the answers it's about asking the right questions and having the right mental models.

With this five-part framework, you can ask the right questions and understand any business and skip MBA school that was the core message that I gathered from their personal MBA. Josh has over 200 business concepts in this book and it is a great handbook to have when analyzing or starting any business I highly recommend it. I rate it 10/10