The Personal MBA 10th Anniversary Edition

The 10th anniversary edition of the bestselling foundational business training manual for ambitious readers, featuring new concepts and mental models: updated, expanded, and revised.

Many people assume they need to attend business school to learn how to build a successful business or advance in their career. That's not true. The vast majority of modern business practice requires little more than common sense, simple arithmetic, and knowledge of a few very important ideas and principles.

"The Personal MBA 10th Anniversary Edition" provides a clear overview of the essentials of every major business topic: entrepreneurship, product development, marketing, sales, negotiation, accounting, finance, productivity, communication, psychology, leadership, systems design, analysis, and operations management...all in one comprehensive volume.

"A gold mine of useful ideas and helpful explanations. Every enterpreneur should own a copy."
James Clear

Key Terms
A Note to the Reader
Preface to the 2020 Edition
Introduction: Why Read This Book?

• You Don't Need to Know It All
• No Experience Necessary
• Questions, Not Answers
• Mental Models, Not Methods
• My Personal MBA
• A Self-Directed Crash Course in Business
• The Wheat and the Chaff
• The Personal MBA Goes Global
• Munger's Mental Models
• Connecting the Dots
• For the Skeptics
• Should You Go to Business School?
• Three Big Problems with Business Schools
• Delusions of Grandeur
• Your Money And Your Life
• Breaking Out the Benjamins
• What an MBA Will Actually Get You
• Where Business Schools Came From
• In Search of Distribution
• Playing with Fire
• No Reason to Change
• The Single Benefit of Business Schools
• I Owe, I Owe - It's Off to Work I Go
• A Better Way
• What You'll Learn in This Book
• How To Use This Book

Value Creation

• This Five Parts of Every Business
• Economically Valuable Skills
• The Iron Law of the Market
• Core Human Drives
• Social Status
• Ten Ways to Evaluate a Market
• The Hidden Benefits of Competition
• The Mercenary Rule
• The Crusader Rule
• Twelve Standard Forms of Value
• Product
• Service
• Shared Resource
• Subscription
• Resale
• Lease
• Agency
• Audience Aggregation
• Loan
• Option
• Insurance
• Capital
• Hassle Premium
• Perceived Value
• Modularity
• Bundling and Unbundling
• Intermeditation and Disintermeditation
• Prototype
• The Iteration Cycle
• Iteration Velocity
• Feedback
• Alternatives
• Trade-offs
• Economis Values
• Relative Imprortance Testing
• Critical Assumptions
• Shadow Testing
• Minimum Viable Offer
• Incremental Augmentation
• Field Testing

Marketing

• Attention
• Receptivity
• Remarkability
• Probable Purchaser
• Preoccupation
• Levels of Awareness
• End Result
• Demonstration
• Qulification
• Point of Market
• Entry
• Addressability
• Desire
• Visualization
• Framing
• Free
• Permission
• Hook
• Call to Action
• Narrative
• Controversy
• Reputation

Sales

• Transaction
• Trust
• Common Ground
• The Pricing Uncertainty Principle
• Four Pricing Methods
• Price Transition Shock
• Value-Based Selling
• Education-Based Selling
• Next Best Alternative
• Exclusivity
• Three Universal Currencies
• Three Dimensions of Negotiation
• Buffer
• Persuasion Resistance
• Reciprocation
• Damaging Admission
• Option Fatigue
• Barriers to Purchase
• Risk Reversal
• Reactivation

Value Delivery

• Value Stream
• Distribution Channel
• The Expectation Effect
• Predictability
• Quality
• Quality Signals
• Throughput
• Duplication
• Multiplication
• Scale
• Accumulation
• Amplification
• Barrier to Competition
• Force Multiplier
• Systemization
• Triagle

Finance

• Profit
• Profit Margin
• Value Capture
• Sufficiency
• Valuation
• Cash Flow Statement
• Income Statement
• Balance Sheet
• Financial Ratios
• Cost-Benefit Analysis
• Four Methods to Increase Revenue
• Pricing Power
• Lifetime Value
• Allowable Acquisition Cost
• Overhead
• Cost: Fixed and Variable
• Incremental Degradation
• Breakeven
• Amortization
• Purchasing Power
• Cash Flow Cycle
• Segregation of Duties
• Limited Authorization
• Opportunity Cost
• Time Value of Money
• Compounding
• Leverage
• Hierarchy of Funding
• Bootstrapping
• Return on Investment
• Sunk Cost
• Internal Controls
• Caveman Syndrome
• Performance Requirements
• The Onion Brain
• Perceptual Control
• Reference Level
• Conservation of Energy
• Reorganization
• Conflict
• Pattern Matching
• Mental Simulation
• Interpretation and Reinterpretation
• Motivation
• Inhibition
• Status Signals
• Status Malfunction
• Loss Aversion
• Threat Lockdown
• Cognitive Scope Limitation
• Association
• Absence Blindness
• Contrast
• Scarcity
• Novelty

Working with Yourself

• Akrasia
• Monoidealism
• Cognitive Switching Penalty
• Four Methods of Completion
• Most Important Tasks
• Goals
• States of Being
• Habits
• Priming
• Decision
• Five-Fold Why
• Five-Fold How
• Next Action
• Externalization
• Self-Elicitation
• Parkinson's Law
• Doomsday Scenario
• Excessive Self-Regard
• Tendency
• Confirmation Bias
• Hindsight Bias
• Performance Load
• Energy Cycles
• Stress and Recovery
• Testing
• Mystique
• Hedonic Treadmill
• Comparison Fallacy
• Locus of Control
• Attachment
• Personal Research and Development
• Limiting Belief
• Malinvestment
• The Necessity of Choice
• The Arrival Fallacy

Working with Others

• Power
• Comparative Advantage
• Communication Overhead
• Importance
• Safety
• The Golden Trifecta
• Reason Why
• Commander's Intent
• Earned Regard
• Bystander Apathy
• Planning Fallacy
• Forcing Function
• Referrals
• Clanning
• Convergence and Divergence
• Social Proof
• Authority
• Commitment and Consistency
• Incentive-Caused Bias
• Modal Bias
• Attribution Error
• The Mind-Reading Fallacy
• Boundary Setting
• The Principle of Charity
• Option Orientation
• Performance-Based Hiring

Understanding Systems

• Gall's Law
• Flow
• Stock
• Slack
• Constraint
• Feedback Loop
• Autocatalysis
• Environment
• Selection Test
• Entropy
• Unicertainty
• Change
• Interdependence
• Counterparty Risk
• Second-Order
• Effects
• Externality
• Normal Accidents

Analyzing Systems

• Deconstruction
• Measurement
• Key Performance Indicators
• Tolerance
• Variance
• Analytical Honesty
• Context
• Sampling
• Margin of Error
• Ratio
• Typicality
• Correlation and Causation
• Norms
• Proxy
• Segmentation
• Humanization

Improving Systems

• Intervention Bias
• Optimization
• Refactoring
• The Critical Few
• Diminishing Returns
• Progressive Load
• Friction
• Automation
• The Paradox of Automation
• The Irony of Automation
• Standard Operating Procedure
• Not "The End"
• Acknowledgments
• How to Continue Your Business Studies
• Forty-Nine Questions to Improve Your Results
• Notes
• Index
• About the Author
• Checklist
• Process Overhead
• Cessation
• Resilience
• Fail-safes
• Stress Testing
• Scenario Planning
• Exploration / Exploitation
• Sustainable Growth Cycle
• The Middle Path
• The Experimental Mind-set