Book SummaryThe Personal MBA, by Josh Kaufman

1-Page Summary1-Page Book Summary of The Personal MBA

In The Personal MBA, bestselling author Josh Kaufman offers a comprehensive overview of how businesses work. He argues that there are five key processes underpinning every business—creating value, marketing, selling, delivering value, and managing finances—and suggests ways to optimize them for successful results.

(Shortform note: The number of key processes underpinning every business is debatable. While management experts agree that Kaufman’s five processes are common to all businesses, they argue that [different types of businesses rely on...

The Personal MBA Summary Part #1: Create Value That Satisfies Needs

According to Kaufman, the first process a successful business must focus on is providing something valuable to trade. In this first part of the guide, we’ll explain the five basic needs underlying all of the different things that people want. We’ll also clarify how people determine the value of products and services and the different ways businesses can provide services that seem valuable. Finally, we’ll discuss why it’s necessary to research the profitability of potential products and services before developing them.

People Want to Fulfill Their Basic Needs

While people appear to want many different things, Kaufman argues that they all make purchases in an attempt to fulfill five basic needs:

1. To feel good about themselves: This includes enhancing their well-being, appearance, and status and satisfying sensory desires.
2. To connect with others: This includes engaging in romantic, platonic, and professional interactions, both online and offline.
3. To grow and learn: This includes increasing academic or professional knowledge and pursuing interests and hobbies.
4. To feel safe: This includes protecting themselves, their loved ones, and their...

The Personal MBA Summary Part #2: Entice Attention

Once a business has something to offer, the second process it needs to focus on is attracting attention and appealing to potential customers. In this section of the guide, we’ll touch on why it’s important to tailor your marketing approach to people who’ve already expressed an interest in your offer. Then, we’ll discuss how to make your offer as appealing as possible.

Identify People Who Might Be Interested in Your Offer

Kaufman argues that people are busy and their minds are always preoccupied with something. With so many demands competing for their attention, they tend to make quick decisions about what’s relevant to them and worth their time. This means that they automatically ignore unsolicited advertisements related to products and services they have no interest in purchasing.

(Shortform note: Charles Duhigg (The Power of Habit) sheds light on why people make quick decisions about what advertisements are relevant to them. Your brain seeks out ways to avoid information overload so that it can function efficiently. It...

The Personal MBA Summary Part #3: Encourage Transactions

After appealing to potential customers, the third process businesses must focus on is securing sales so that they can recoup their investment and make a profit. In this third part of the guide, we’ll first explore tactics businesses use to encourage sales. Then, we’ll discuss different strategies for determining your prices.

Customers Feel No Sense of Urgency to Hand Over Their Money

Once a business has caught the attention of potential customers, it’s in their interest to complete transactions as quickly as possible. Otherwise, short attention spans coupled with the desire to keep options open influence these people to drift away. However, while businesses want to make sales as quickly as possible, Kaufman argues that customers don’t feel this same sense of urgency. They often have a range of alternatives to explore and want to take time to ensure they’re getting the best value for their money.

(Shortform note: Research clarifies why people prefer to keep their options open instead of completing transactions. Browsing for products online or window shopping involves anticipating what it would be like to have all of these different things in your life. This process...

The Personal MBA Summary Part #4: Fulfill Expectations

After making a sale, the fourth process businesses must focus on is ensuring that customers are satisfied with their purchases. In this section of the guide, we’ll first clarify why prioritizing customer satisfaction is essential to business success. Then we’ll explain how optimizing your resources and procedures ensures customer satisfaction and allows your business to thrive.

Satisfied Customers Are the Key to Long-Term Success

Kaufman argues that successful businesses pay as much attention to meeting or surpassing customer expectations after a sale as they do on attracting new customers. This is because satisfied customers often become repeat customers and offer a reliable source of long-term revenue. They also give positive reviews that bolster your reputation—thus attracting even more customers free of charge.

(Shortform note: In addition to offering a reliable source of revenue and bolstering your reputation, satisfied customers provide two benefits: First, they’re more likely to offer feedback and a deeper understanding of their motivations, which will help you to...

Shortform Exercise: Does Your Offer Align With What People Want?

According to Kaufman, successful businesses offer products and services that fulfill people’s basic needs. This exercise will help you think about how potential customers might judge the value of your offer.

Briefly describe your product or service.

Shortform Exercise: Optimize Your Systems and Procedures

Kaufman argues that successful businesses ensure that their operations are as efficient and reliable as possible, so as to keep customers satisfied. This exercise will help you consider ways to make incremental improvements to save time, effort, and money.

Briefly describe all of the steps it takes to create your product or service. This includes designing it, manufacturing it, and ensuring quality control.