Book: The Breakthrough Company

The Breakthrough Company
Keith McFarland

ISBN-13: 978-0307352194
Both Good to Great and The Breakthrough Company are somewhat off topic for now: “book that helps people like me solve the real problems of moving beyond the entrepreneurial stage of development”, where ‘beyond the entrepreneurial stage ofdevelopment’ actually means sales over $250mln. Yet there’s some good stuff to take home.

Few randoms:

  • “Our study makes one thing clear: Building a breakthrough company is less about choosing the right industry and more about acting on the opportunities already available in your existing business” He says that because the breakthrough examples they found where spread all around different industries, rather than being concentrated in the hottest areas of technology, energy, bio…
  • “It’s not about where (or whether) you went to school.” Can I please please mention my school post AGAIN?
  • “You don’t always need other people’s money…We were shocked by the fact that not one of nine [all of the nine prime examples of breakthrough success] breakthrough companies  was funded by venture capital in their start-up years.” Super surprising to me.
  • How employees feel about working in a place is a significant driver of success…[those companies often had] Fortune magazine’s best places to work, hanging prominently on the wall”
  • “While one might expect that entrepreneurs lead through their visionary ideas, the TAIS results show that entrepreneurs actually influence people through deep personal relationships. Entrepreneurs, in other words are successful because they build positive personal and emotional connections with people and groups, traits more commonly associated with sales people. These connections can become liability, however, if entrepreneurs lose their ability to make objective decisions about personnel they’ve become quite friendly with or with whom they’ve worked a long time.” Sooo interesting. Just building a castle in the sky doesn’t work anymore. You have to go back to the ground, and make all those people around you – employees, partners, spouses, investors – fly high and to YOUR castle. That’s when you can make it.
  • “Don’t diversify before you own your existing market”


  • “Our research suggests that one thing that separates breakthrough company from the rest of the pack is a willingness to up the ante, to place bigger and bigger bets as the business grows – combined with the instincts to place the right bet at the right time.” BUT:
  • “Entrepreneurs are born risk takers – this plays right to their strengths, right? Wrong. We were surprised to learn that entrepreneurial leaders, in fact, are often more risk averse than is popularly believed….There appears to be no significant correlation between risk tolerance and starting or running an entrepreneurial business…to most successful entrepreneurs, starting a business isn’t much of a risk at all”. It is true that it is more risky to be at a job, than to run your own business. You can get fired again and again and you can do nothing. This is HUGE risk, without any great return.
  • Interesting fact: “Twenty venture capital companies rejected him before he eventually turned to family and friends [check the fishes section in this post] to borrow the money to get his new company started.” Talking about the founder of Intuit (Quicken Quickbooks)
  • It seems that gambling and betting is not the same thing. Gambling seems to be more like i will put my money on red and luck decides, while betting is when you have some facts to consider, some rational, some strategy and calculations on possible outcomes.
  • Breakthrough leaders seem to do exponential bets. “One + One + One = Six. That’s the math of the exponential bet, the art of linking bets together to build real advantages over your competitors”
  • “While these companies may place additional bets to make sure they “win, even if they lose,” they don’t “hedge” through indecision; they pursue victory with all their might. Oooou, this is curious. ‘I bet on this product, that it will work. When it doesn’t, I fix it and I bet again.
  • Instead of asking “How will we know when it is time to ‘take down’ the bet?”. You won’t – breakthrough companies ask questions BEFORE the bet.

OUTSIDE HELP – Scaffolding

  • “While YPO [forum] and other peer networks can be important forms of organizational scaffolding, we found that breakthrough companies are also adept at using other forms of scaffolding, such as advisory board, boards of directors, and customer or dealer counsils, as well as investors, industry experts, consultants, and advisors. What sets the breakthrough companies apart, however, is not that they have these support structures […] but the optimal manner in which they learn from them.” This is tremendously important.
  • “… entrepreneurial leaders tend to be great at figuring things out, and are supremely confident in their abilities to find the right answer. That’s great in a start-up environment, but as a business grows, leaders need to be willing to look outside their own four walls for people with the experience, connections, and perspective they may lack.”
  • “1) Do you know anyone who heads up a marketing department at a company with revenues ofover $100 million and has experience in brand marketing?
    2) Why, are you trying to recruit someone?
    1) No, I wanted to find a mentor for my head marketing. She does a great job now, but she’ll need to keep expanding her skills if she’s going to lead marketing for us when we’re a half-a-billion-dollar company. I want to find someone who can help her prepare for the new responsibilities she’ll need to take on as our company grows”

INSIDE HELP – insultants (inside consultants)

  • “They created companies where people are encouraged to question the fundamental assumptions of the business.”
  • “If leaders don’t work hard to build an environment where it is okay to bring up potentially bad news, it will get buried. In the words of Polaris CEO Tom Tiller, “Good news rises and bad news sinks like a rock”

Don’t loose your sense of HUMOR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

“…the companies that were imbued with a sense of humor tended to embrace new ideas and modes of thinking more readily than their more serious counterparts. This sense of humor also seemed to fuel an insultant-friendly atmosphere, as team members, in general, seemed less defensive and more proactive.”

Tough Times University

  • He explained that EVERY one of those 9 companies run into a super hard situation, where they had to get out. He calls that ‘enrolling to Tough Times University’.
  • “Anyone can run a company during tough times – it’s the good times that actually challenge leaders the most”.


  • “Spending three months crafting a strategy pretty much guarantees that it will be obsolete before the ink on the final report is dry.”
  • “We need an approach that is light on theory and heavy on action”

What is the one thing that surprised you?!