When Jim Koch left a comfortable career at Boston Consulting Group in 1984 to start the Boston Beer Company, his father told him he was making a terrible mistake.
The Kochs are a family of brewers, but Koch’s dad thought the idea of trying to enter an industry dominated by brands like Budweiser and Coors was destined for failure.
Koch, however, started by aiming at a niche market. Today craft breweries produce 10% of all the beer in the United States, and Sam Adams is at the head of the pack, accounting for a full 1% of that slice, and bringing in more than a billion dollars in annual revenue.
In his new book “Quench Your Own Thirst,” Koch shares 10 books he finds have had the most impact on his success. He previously explained the value of the first two selections in an interview with Business Insider last year, saying they helped him develop a philosophy of prioritising customers over shareholders and using constant innovation as an advantage.
These are the titles he recommends you pick up if you’re an aspiring entrepreneur or leader.
Deming was an American statistician who spent a decade in Japan after World War II. His lectures, consultation, and training contributed significantly to the country's postwar economic boom and the emergence of fine Japanese products on the global market.
In 1951, the Japanese Union of Scientists and Engineers created the Deming Prize for exceptional achievement in industry, but Deming didn't gain notoriety in the US until the '80s.
His 1986 book 'Out of the Crisis,' which Koch said is written in charming colloquial language, outlines 14 management points that advocate for the need to forecast, stay innovative, and empower employees.
'Long-term commitment to new learning and new philosophy is required of any management that seeks transformation,' Deming wrote. 'The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.'
Koch said he takes this approach to his business, ignoring the daily ups and downs of the Boston Beer Company's stock price and prioritising long-term growth over short-term results.
'So I'm worried about, where are we in two years? In five years? How do I make this the best, strongest, healthiest company I can?' Koch told us.
The late physicist's book has become 'one of the most cited academic books of all time' since its initial publication in 1962, establishing Kuhn as 'perhaps the most influential' philosopher of science in the 20th century, according to the Stanford Encyclopedia of Philosophy.
Kuhn's book is best remembered for introducing the phrase 'paradigm shift,' representing instances in scientific history when a perspective was fundamentally shifted, like when quantum physics replaced Newtonian mechanics.
The paradigm shift theory can be applied to aspects of business as well, such as the way Americans expanded their beer consumption past huge brands like Budweiser and Heineken over the past two decades.
'The Structure of Scientific Revolutions' helped Koch 'think about removing the blinders and not think within constraints,' Koch told us.
'To be able to say, 'I know this is the way the world is, but why can't it be different and better?''
Before returning to Harvard to finish the dual MBA/JD program in 1978, Koch took a break and spent a few years as an Outward Bound instructor. Outward Bound is organisation dedicated to fostering personal development through team building exercises outdoors.
In his book, Koch writes that his Harvard classmates may have turned up their noses at his decision, but he considers it pivotal to his success as an entrepreneur. 'I found it invigorating to have no real responsibilities except to myself -- life was now a blank canvas, every day a new choice.'
One of the guides he came across during this time was the annual safety guide from the American Alpine Club, which uses the year's worst mountain climbing accidents to explain how such mistakes can be avoided. Koch later internalized it as a metaphor for business.
'Most fatalities begin as small mistakes that get compounded by unexpected conditions and bad judgment,' he wrote. 'There is usually a point where the right decision needs to be made and, if not made, fatality can only be avoided with unusually good luck (which rarely happens).'
'The Hero with a Thousand Faces' is a collection of Joseph Campbell's most important writings, and was first published in 1949. As a student of Carl Jung, Campbell used theories of comparative mythology to determine the narratives that human civilisation has used since it began, from Mesopotamian myths to 'Star Wars,' to transmit timeless wisdom.
Koch was particularly inspired by Campbell's analysis of 'the Hero's Journey.'
'Campbell shows us how the gathering of internal resources is at the heart of all adventures and warns of the consequences for those who falter through pride and vanity.'
Koch was inspired by Steve Jobs's legendary second run as CEO of Apple, in which he turned it into one of the world's largest and most influential companies.
Koch has found Walter Isaacson's definitive 2011 biography of the late entrepreneur to be a reminder that he must never lose sight of the consumer as the Boston Beer Company continues to grow well beyond its humble origins.
'Jobs's complete focus not on the product itself but on the consumer experience, from a single grand concept to the fanciest details, is unforgettable,' he writes.
In 1985, Koch and his colleague Rhonda Kallman closed up their business at the Boston Consulting Company and were ready to dedicate themselves fully to their new company, the Boston Beer Company.
Koch had a bachelor's degree, MBA, and JD from Harvard, but despite extensive and elite schooling, he quickly realised he had no idea how to be a salesman.
'Over-educated people at the time thumbed their noses at salespeople, seeing them as manipulative, unscrupulous, and dishonest hucksters,' he wrote, adding that not much has changed in the past 30 years, and that's a shame. Therefore, he didn't find it silly to turn to a 'For Dummies' introduction to selling.
'Selling is applied communication and vastly underrated in business education,' he wrote. 'If you want to know how viable your business is, go try to sell your product to some potential customers. This book is a solid primer on basic selling skills. You won't need much more.'
At Boston Beer Company, there's the 'F -- You Rule,' where any employees can tell a colleague or manager -- even Koch himself -- 'f -- you,' as long as they explain why they have a problem with that person and reach a solution. It's an especially colourful interpretation of the value of transparency at organisations.
The inspiration for this rule, Koch wrote, came from Harvard professor Chris Argyris' and MIT professor Donald A. Schön's 1992 treatise, although he thinks they 'developed it in academic jargon that nearly gave me brain damage.'
Despite it not being an easy read, Koch found it to be a convincing assessment of how unsuccessful organisations fail to adapt to change and 'why individuals are often smarter than organisations.'
Koch has been in the beer industry for over 30 years now, but told Business Insider that what keeps him motivated isn't the prospect of making more money, but creating new beers that delight him. He's been successful because he is deeply passionate about beer, even though one could say it's 'just beer.'
He wrote that Nikki Giovanni's 2013 collection of poems and essays that explore beauty in the mundane, 'showed that a truly beautiful beer, like a wonderful poem, has no reason to exist beyond our attraction to wonder and grace and that even the grandest of concepts find their existence in everyday objects like a bottle of (Sam Adam's $200 high-end offering) Utopias.'
Koch draws inspiration from the Argentine writer Jorge Luis Borges's stories of 'magical realism,' in which elements of fantasy live in an otherwise familiar world.
He's found that in the same way Borges is able to reach powerful insights by 'slightly reimagining our everyday world,' he's been able to make decisions that turned a family recipe for beer into the foundation for a company that now produces a full 1% of the beer in the United States, despite domination by big brands like Budweiser and Coors.
An edition of Guinness World Records is a fun gift for a kid, but Koch said he sees it as much more than a mere amusement.
'So familiar but rarely read as what it is: a compendium of human imagination, striving, and accomplishments great, comical, and even bizarre, sometimes from the great and talented but mostly from those, like the rest of us, who are ordinary and obsessed,' he wrote.
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