The Personal MBA: Master the Art of Business

The Personal MBA: Master the Art of Business

by Josh Kaufman


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Master the fundamentals, hone your business instincts, and save a fortune in tuition.

The consensus is clear: MBA programs are a waste of time and money. Even the elite schools offer outdated assembly-line educations about profit-and-loss statements and PowerPoint presentations. After two years poring over sanitized case studies, students are shuffled off into middle management to find out how business really works.

Josh Kaufman has made a business out of distilling the core principles of business and delivering them quickly and concisely to people at all stages of their careers. His blog has introduced hundreds of thousands of readers to the best business books and most powerful business concepts of all time. In The Personal MBA, he shares the essentials of sales, marketing, negotiation, strategy, and much more.

True leaders aren't made by business schools-they make themselves, seeking out the knowledge, skills, and experiences they need to succeed. Read this book and in one week you will learn the principles it takes most people a lifetime to master.

Product Details

ISBN-13: 9781591845577
Publisher: Penguin Publishing Group
Publication date: 08/28/2012
Pages: 464
Sales rank: 47,304
Product dimensions: 8.40(w) x 5.40(h) x 1.30(d)
Age Range: 18 Years

About the Author

Josh Kaufman helps people make more money, get more done, and have more fun. His first book, The Personal MBA: Master the Art of Business, is an international bestseller. He lives in Colorado.

Table of Contents

Key Terms xiii

A Note to the Reader xvii

Introduction: Why Read this Book? 1

You Don't Need to Know It All 2

No Experience Necessary 3

Questions, Not Answers 4

Mental Models, Not Methods 4

My "Personal" MBA 6

A Self-Directed Crash Course in Business 7

The Wheat and the Chaff 9

The Personal MBA Goes Global 10

Munger's Mental Models 12

Connecting the Dots 15

For the Skeptics 17

Should You Go to Business School? 17

Three Big Problems with Business Schools 18

Delusions of Grandeur 19

Your Money AND Your Life 20

Breaking Out the Benjamins 21

What an MBA Will Actually Get You 22

Where Business Schools Came From 24

In Search of Distribution 25

Playing with Fire 26

No Reason to Change 28

The Single Benefit of Business Schools 29

I Owe, I Owe-It's Off to Work I Go 30

A Better Way 31

What You'll Learn in This Book 32

How to Use This Book 35

1 Value Creation 37

The Five Parts of Every Business 38

Economically Valuable Skills 39

The Iron Law of the Market 40

Core Human Drives 41

Status Seeking 43

Ten Ways to Evaluate a Market 44

The Hidden Benefits of Competition 46

The Mercenary Rule 47

The Crusader Rule 48

Twelve Standard Forms of Value 49

Form of Value #1: Product 50

Form of Value #2: Service 51

Form of Value #3: Shared Resource 52

Form of Value #4: Subscription 53

Form of Value #5: Resale 54

Form of Value #6: Lease 55

Form of Value #7: Agency 56

Form of Value #8: Audience Aggregation 57

Form of Value #9: Loan 58

Form of Value #10: Option 60

Form of Value #11: Insurance 61

Form of Value #12: Capital 62

Hassle Premium 63

Perceived Value 64

Modularity 65

Bundling and Unbundling 66

Prototype 67

The Iteration Cycle 68

Iteration Velocity 69

Feedback 70

Alternatives 72

Trade-offs 73

Economic Values 74

Relative Importance Testing 76

Critical Assumptions 78

Shadow Testing 80

Minimum Viable Offer 81

Incremental Augmentation 83

Field Testing 84

2 Marketing 86

Attention 87

Receptivity 88

Remarkability 89

Probable Purchaser 90

Preoccupation 91

End Result 92

Qualification 93

Point of Market Entry 95

Addressability 96

Desire 98

Visualization 99

Framing 100

Free 102

Permission 103

Hook 105

Call-To-Action (CTA) 106

Narrative 107

Controversy 108

Reputation 110

3 Sales 112

Transaction 113

Trust 114

Common Ground 115

Pricing Uncertainty Principle 116

Four Pricing Methods 117

Price Transition Shock 120

Value-Based Selling 122

Education-Based Selling 123

Next Best Alternative 125

Exclusivity 126

Three Universal Currencies 127

Three Dimensions of Negotiation 128

Buffer 130

Persuasion Resistance 132

Reciprocation 134

Damaging Admission 136

Barriers to Purchase 137

Risk Reversal 139

Reactivation 141

4 Value Delivery 143

Value Stream 144

Distribution Channel 146

The Expectation Effect 147

Predictability 149

Throughput 151

Duplication 152

Multiplication 153

Scale 154

Accumulation 155

Amplification 156

Barrier to Competition 157

Force Multiplier 158

Systemization 160

5 Finance 162

Profit 163

Profit Margin 164

Value Capture 165

Sufficiency 167

Valuation 169

Cash Flow Statement 170

Income Statement 172

Balance Sheet 174

Financial Ratios 176

Cost-Benefit Analysis 178

Four Methods to Increase Revenue 179

Pricing Power 180

Lifetime Value 181

Allowable Acquisition Cost (AAC) 182

Overhead 184

Costs: Fixed and Variable 185

Incremental Degradation 186

Breakeven 187

Amortization 188

Purchasing Power 190

Cash Flow Cycle 191

Opportunity Cost 193

Time Value of Money 194

Compounding 195

Leverage 196

Hierarchy of Funding 198

Bootstrapping 202

Return on Investment (ROI) 203

Sunk Cost 204

Internal Controls 205

6 The Human Mind 208

Caveman Syndrome 208

Performance Requirements 210

The Onion Brain 213

Perceptual Control 215

Reference Level 217

Conservation of Energy 219

Guiding Structure 221

Reorganization 222

Conflict 224

Pattern Matching 226

Mental Simulation 227

Interpretation and Reinterpretation 229

Motivation 231

Inhibition 233

Willpower Depletion 234

Loss Aversion 236

Threat Lockdown 237

Cognitive Scope Limitation 240

Association 242

Absence Blindness 244

Contrast 246

Scarcity 248

Novelty 250

7 Working with Yourself 252

Akrasia 252

Monoidealism 255

Cognitive Switching Penalty 257

Four Methods of Completion 260

Most Important Tasks 261

Goals 262

States of Being 264

Habits 266

Priming 267

Decision 269

Five-Fold Why 271

Five-Fold How 272

Next Action 273

Externalization 274

Self-Elicitation 276

Counterfactual Simulation 278

Parkinson's Law 280

Doomsday Scenario 281

Excessive Self-Regard Te ndency 282

Confirmation Bias 285

Hindsight Bias 286

Performance Load 287

Energy Cycles 288

Stress and Recovery 290

Testing 293

Mystique 295

Hedonic Treadmill 296

Comparison Fallacy 299

Locus of Control 301

Attachment 302

Personal Research and Development (R&D) 303

Limiting Belief 305

8 Working with Others 307

Power 308

Comparative Advantage 309

Communication Overhead 311

Importance 313

Safety 314

Golden Trifecta 316

Reason Why 317

Commander's Intent 318

Bystander Apathy 319

Planning Fallacy 320

Referrals 322

Clanning 323

Convergence and Divergence 325

Social Signals 327

Social Proof 328

Authority 329

Commitment and Consistency 331

Incentive-Caused Bias 333

Modal Bias 334

Pygmalion Effect 335

Attribution Error 337

Option Orientation 338

Management 339

Performance-Based Hiring 342

9 Understanding Systems 346

Gall's Law 346

Flow 348

Stock 348

Slack 349

Constraint 350

Feedback Loop 352

Autocatalysis 353

Environment 354

Selection Test 355

Uncertainty 356

Change 358

Interdependence 359

Counterparty Risk 361

Second-Order Effects 362

Normal Accidents 364

10 Analyzing Systems 366

Deconstruction 366

Measurement 368

Key Performance Indicator 369

Garbage In, Garbage Out 371

Tolerance 372

Analytical Honesty 373

Context 375

Sampling 376

Margin of Error 377

Ratio 378

Typicality 379

Correlation and Causation 381

Norms 382

Proxy 383

Segmentation 385

Humanization 386

11 Improving Systems 388

Intervention Bias 388

Optimization 390

Refactoring 391

The Critical Few 392

Diminishing Returns 394

Friction 395

Automation 397

The Paradox of Automation 398

The Irony of Automation 399

Standard Operating Procedure 400

Checklist 401

Cessation 403

Resilience 404

Fail-safe 406

Stress Testing 408

Scenario Planning 410

Sustainable Growth Cycle 411

The Middle Path 413

The Experimental Mind-set 413

Not "The End" 414

Acknowledgments 419

Appendix A How to Continue Your Business Studies 421

Appendix B Forty-nine Questions to Improve Your Results 427

Notes 431

Index 435

What People are Saying About This

From the Publisher

"I've run across few people who conceptually 'grok' how to get things done better than Josh Kaufman."
-David Allen, author of Getting Things Done

"File this book under NO EXCUSES. After you've read it, you won't be open to people telling you that you're not smart enough, not insightful enough, or not learned enough to do work that matters. Josh takes you on a worthwhile tour of the key ideas in business."
-Seth Godin, author of Linchpin

"No matter what they tell you, an MBA is not essential. If you combine reading this book with actually trying stuff, you'll be far ahead in the business game."
-Kevin Kelly, founding executive editor, Wired, and author of What Technology Wants

"A creative, breakthrough approach to business education. I have an MBA from a top business school, and this book helped me understand business in a whole new way."
-Ali Safa vi, executive director of international sales and distribution, The Walt Disney Company

"An absolutely amazing book! I'm highly recommending this to all creative types, for the best overview of the modern business mind-set they need."
-Derek Sivers, founder, CD Baby,

"Josh has synthesized the most important topics in business into a book that truly lives up to its title. It's rare to find complicated concepts explained with such clarity. Highly recommended."
-Ben Casnocha, author of My Start-Up Life

"An enterprising and thrifty way to hack business school. This is a fantastic resource for motivated autodidacts looking to get into business."
-Gina Trapani, founding editor,, and author of Upgrade Your Life

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Personal MBA 3.6 out of 5 based on 0 ratings. 29 reviews.
Anonymous More than 1 year ago
As an MBA student, I found this book to be very useful. Allthough I am a veteran and have the GI bill to pay for my MBA, if you are considering an MBA I reccomend this book, it could save you lots of money.
Anonymous More than 1 year ago
This book gives you the lowdown on what an expensive MBA will not do for you, then proceeds to give you some alternatives. It's a high level view but a great intro and overview into what you need to know about business. I'd recommend it to everyone contemplating an MBA program.
fakelvis on LibraryThing More than 1 year ago
A wonderful, concise overview of business topics, usually reserved for MBA students and business aficionados.Josh Kaufman managed to make this both accessible, interesting, and very 'learnable'.Organised into twelve chapters (Introduction, Value Creation, Marketing, Sales, Value delivery, Finance, The Human Mind, Working with Yourself, Working with Others, Understanding Systems, Analysing Systems, Improving Systems), each further broken up into small, bite-sized chunks of information, you can easily pick this book up for a two-hours read or a five-minute read.As a reader of numerous psychology and productivity books, a number of chapters in the middle where somewhat tedious and simplified (The Human Mind, particularly). Regardless, the book as a whole is still a fantastic resource and deserves a spot on your shelf.
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