Required Reading…

I had the chance to catch up on a little light reading over the last week: Founders at Work and Mr. China. Here’s what I learned. Founders at Work is inspiring reading about some incredible founders from the past few years and the past few decades. Key takeaways are that it’s people first, ideas second; and that whatever the original idea for a company, success will likely be the result of a much different idea.

Successful entrepreneurs have known for a long time that the best way to start a company is to find some good people to work with and then just to start working. The “right” idea often comes about as the result of working on one thing and then solving another problem in the process, or of being in the right general area and nimble enough to switch courses when a new path presents itself.

The trick for investors, of course, is to invest after a few of the experiments have been run but before the successful experiment plays itself out. The great entrepreneurs in Founders at Work were able to run lean and mean while they were in experiment mode and then used capital to move their business forward more aggressively.

Everyone has been talking about Mr. China and it is a great read. It’s the story of a former Andersen consultant who moves to China to enter the new world of business there in the 1990′s. He teams up with an investment banker and together they invest (and lose) hundreds of millions of dollars. I loved the book but wondered why it took them eight years to learn the lesson, “when in Rome, do like the Romans.”

It was also notable that the author was as surprised as he was by the actions of some of the people he invested in, who then set up next-generation, competitive shops right next door or mis-used their investors’ money. The entrepreneurs profiled in the book were extremely aggressive, yet they didn’t seem that much different from, say, the Intel founders setting up shop after Fairchild, or the Enron execs mis-allocating money from their stock holders and pensioners.

The author comments at the end on how in fighting the day to day battles he became out of touch with the overall evolution of the country. The fact that in the midst of the action it’s easy to lose sight of the big picture is, in and of itself, a great takeaway. Moreover, there will always be someone else who neglects the importance of really understanding the local environment and wants to become the next “Mr. China.” The author has done all businesspeople a service by sharing the story of his life in China – it’s a funny and very worthwhile read.