This weekend, I read The Personal MBA by Josh Kaufman. The book covers exactly what the title suggests. It doesn’t replace a real MBA from a reputable business school, but Kaufman argues that statistics show completing an MBA doesn’t necessarily lead to a better life. Still, who truly believes it guarantees success in the first place?
I don’t have an MBA myself, but I see two clear benefits of earning one:
- Access to exceptional professors and teachers
- A foot in the door — when nobody knows you, a degree can open opportunities. The better the institution, the more valuable the access.
What you do with that access is entirely up to you.
Although I finished the entire book in a single weekend, I have to admit I cheated a bit: I read and listened to it at the same time. I started at 1.5x playback speed and ended at around 2.5x. This helps me stay focused and avoid distractions.
I keep a pen nearby and mark everything I find valuable. This blog post is a summary of those highlights.
Most of Kaufman’s ideas weren’t new to me. I’ve been running run_as_root for about five years and have read many business-oriented books in that time. Still, I wish I had read this one earlier — it would have saved me time and decisions.
I highly recommend the book to anyone new to running a business. It’s a solid starting point, and like any good book, its references to other valuable resources are worth exploring.
Perceived Value
Price works only if value is clear. Kaufman shows that customers judge offers not by cost but by the gap between what they expect and what they get. In software, this is the “painkiller vs. vitamin” problem: products that solve urgent problems command higher prices.
Economic Values
There are five core values customers pay for: time, money, energy, social status, and information. Businesses that address multiple values simultaneously tend to grow faster.
Free
Free creates demand but carries hidden costs. Behavioral studies show that customers overvalue zero-price items even when paid alternatives offer more utility. Use free carefully; anchor it to future conversion.
Four Pricing Methods
Kaufman identifies four dominant models:
- Cost-plus
- Market-comparison
- Value-based
- Auction-drivenValue-based pricing outperforms when you can quantify measurable business impact.
Education-Based Selling
The most effective sales don’t pitch — they teach. Research on B2B buying shows buyers complete 57% of their decision process before contacting a vendor. Content, demos, and calculators outperform traditional sales scripts.
Profit and Profit Margin
Revenue is meaningless without profit. Margin discipline protects operational freedom. A 20% margin creates optionality; a 5% margin forces fragility.
Valuation and Lifetime Value
Lifetime Value (LTV) defines how much you can spend on customer acquisition without burning capital. Allowable Acquisition Cost (AAC) = LTV ÷ 3 is a safe operational heuristic.
Perceptual Control & Reference Levels
Behavioral control theory shows people act to maintain internal reference levels, not to achieve external goals. Lowering perceived friction increases compliance without changing incentives.
Priming
Exposure to stimuli changes subsequent decisions unconsciously. In pricing, anchoring works: presenting a high initial price increases acceptance of mid-tier offers.
Five-Fold Why
Root-cause analysis relies on iteratively asking “why” until systemic drivers emerge. Toyota Production System data shows 80% of recurring failures come from upstream process defects.
Hindsight Bias & Planning Fallacy
Teams consistently underestimate timelines and overestimate capabilities. Kahneman & Tversky’s studies show human forecasts are 30–40% too optimistic. Use reference-class forecasting instead of gut estimates.
Hedonic Treadmill
Satisfaction decays predictably. Research shows baseline happiness returns to pre-event levels within six months, even after significant financial gains. Avoid chasing temporary peaks in compensation design.
Communication Overhead
Productivity scales nonlinearly with team size. Dunbar’s number (~150 stable relationships) still applies. Small, cross-functional teams ship faster and fail less.
Commander’s Intent
Military doctrine: define desired outcomes, not step-by-step plans. This reduces coordination cost under uncertainty and accelerates decision-making.
Bystander Apathy
Diffusion of responsibility increases with group size. In design and ops, assign clear ownership; otherwise, failures cascade silently.
Option Orientation & Second-Order Effects
Maintain strategic optionality: small, reversible bets outperform big, irreversible commitments. Always evaluate second-order effects before scaling.
Garbage In, Garbage Out
Data quality determines decision quality. Studies on machine learning pipelines show 80% of errors originate from poorly curated input data, not model architecture.
Tolerance, Sampling, and Margin of Error
Any measurement system carries uncertainty. Always communicate results with confidence intervals. Overstating precision undermines credibility.
Progressive Load & Automation Paradox
Introduce system complexity gradually. Full automation accelerates throughput but magnifies single-point failures. Balance human oversight with automation depth.
Standard Operating Procedures (SOPs)
SOPs reduce variance. But static procedures decay quickly; Kaufman suggests reviewing SOPs quarterly to prevent silent drift.
Cessation
Stopping is a valid strategy. Ending projects, products, or processes frees resources for higher-leverage work.
Operational Takeaways
- Price on value, not cost.
- Teach before selling.
- Use LTV to set safe acquisition limits.
- Reduce friction instead of increasing incentives.
- Forecast using data, not intuition.
- Keep teams small, decisions decentralized.
- Automate gradually, validate continuously.