5 books every budding entrepreneur needs to read

Startup School

Before you even start thinking about starting your own company, read these books. Photo by Utamaru Kido/Getty Images

You thought you were done with homework, but, if you're an entrepreneur looking to start a company, that's not the case. The startup world is a lot of fun, but also a lot of work and preparation.

So, what kind of homework should you do? Unfortunately, watching Shark Tank and HBO's Silicon Valley can only take you so far. You need to know about pre-money valuations, convertible notes, liquidation preferences, control provisions, and so much more. Fortunately, there are plenty of books to get you up to speed. Yes, books — do you remember those? Turns out plain old books can be very useful if you're looking to get involved with the even the highest tech parts of the startup world. So here are five books to get you started.

The Launch Pad: Inside Y Combinator, Silicon Valley's Most Exclusive School for Startups

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As a startup founder, you'll need to know what Y Combinator is, how it works, what the people are like, and how great founders and mentors conduct themselves. This book offers a behind the scenes look at the most elite startup incubator/accelerator. Why is it the most elite? Because it keeps producing unicorns (companies valued at over $1 billion) — think AirBnb, Dropbox, Twitch, Stripe. With this book, you'll really get a sense of the day to day conversations and challenges that startups face. It is also just a really entertaining book and a great starting point.

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

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After reading Launch Pad, it is time to get down to business. Venture Deals is a fairly in-depth breakdown of the relationship between investors and startup founders. It runs through typical VC titles, processes, and incentives. Perhaps most importantly, it goes into the economic and control provisions of the term sheet. You'll want a pen and paper to take plenty of notes when going through this one. Do not expect this book to always be fun, but do expect to learn a lot. If you can make it through this one and really absorb what is being said then you might actually be serious about the startup world, so good job.

Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs

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Whether you'll be a founder, investor, reporter, or just want to be a successful person, you need to set lofty goals, write them down, share them, and stick to them. OKR stands for objectives and key result. This book is less about startups and more about pushing yourself to achieve more. OKRs force you to break down your goals in metrics that can be tracked. For example, I knew I wanted to meet with hundreds of startups per year for my investment job. But how many exactly? How do I set a goal for that? Simple — just say you need to meet with at least two startups per day for a least one hour. That means at least 10 startups per week (five working days), or over 40 per month. Set lofty goals, so that you fail to achieve 30 percent of them.

Startup CEO: A Field Guide to Scaling Up Your Business

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Time to step inside the shoes of the CEO — must be nice to be in charge, right? I'm sure it is nice in some ways, but it is also an unbelievable amount of work. This book goes through every last detail — in detail. You may feel overwhelmed at times, but you might also feel ready to manage a company. There is much more to managing a company than can be found in a single book, but this is a great breakdown of the day-to-day activities. It has tips on how to be organized, prioritize time, grow your key employees, and interact with the board of directors. Sure, you'll still need to build a great product that customers want, and you'll still need to have great interpersonal and communication skills, but at least this book describes the details of how to operate.

​Zero to One: Notes on Startups, or How to Build the Future​

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The final book in this short list will drive you to think big — and think differently. Think about building a dominating monopoly. Yes, monopolies are a good thing when you're the one making the business. I hope that concept is not too upsetting, but you should be ruthless when you are out there competing. That means giving your customers something amazing that your competition can't even compete with. If you think about it, the big tech companies pretty much dominate at least one market. Google has search and maps. Facebook, since owning Instagram, has social media. Amazon has logistics. If you're going to start a startup you should aim to be 10 times better than any competition in one key way. You want to clearly differentiate your product from your competition. Zero to One teaches you how to think that way, and so much more.

So, there you have it. I think these five books will give you a good starting point. There are a dozen or more other books you should also read about innovating, investing, and managing, but you must start somewhere. This list gives you a little bit of everything to get you started.

Now, you just have to actually start.

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Mark Friday is an associate leading venture capital investments at Houston-based Cathexis Holdings LP.

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Houston lab explores how AI bots can help the elderly

AI for aging

The University of Houston’s Empathetic Lifespan AI & Robotics for Aging (ELARA) Lab is currently conducting research into how AI bots may be able to help the elderly live more social and independent lives through several ongoing initiatives.

The lab officially launched last month as part of the Gerald D. Hines College of Architecture & Design under the leadership of Assistant Professor Chorong Park. Part of the lab’s mission is tackling ongoing problems with aging, such as dealing with disabilities and social isolation. Researchers’ current work is focused on designing a new AI companion bot specifically tailored to the needs of older people.

“We need to take all the needs of older adults seriously,” Park said in a news release. “They won't use the robot if they don't feel at ease or if they feel they are being constantly watched.”

The field testing of new AI bots in this population hopes to overcome several traditional obstacles in technology use among the elderly. A study by Park shows that many older people have a fear of overt surveillance when using advanced AI. There is also ageism to consider. Most new technologies are designed with younger and employed buyers in mind, not retirees who may need help remembering daily tasks or accessing important information.

“The more older adults are excluded from technology development, the worse those technology gaps will become,” Park said. “AI and the majority of technologies are created for younger people, so my research method integrates older adults directly into the design process.”

ELARA recently collaborated with the Mamie George Community Center in Richmond, Texas, to track seniors’ response to desktop AI bots like Emo and Cupboo. Researchers also had participants use air-dry modeling clay to create their ideal robotic companion.

While the eventual AI bot may be able to help the elderly feel less isolated and more supported, there are concerns to consider. A study published in the Asian Journal of Psychology charted the development of delusional thinking in a 72-year-old woman who became convinced the empathic-response bot was in love with her. The rise of “AI psychosis” has the potential to exacerbate mental health problems, particularly in socially isolated people, which a quarter of Americans over the age of 65 are.

ELARA’s research is focused on creating “pet-like” AI models with enhanced trust cues. If it can overcome the dangers of socially isolated people relying on AI for companionship, it could be a big step forward for independent aging.

SpaceX IPO set to be biggest ever and could make Elon Musk a trillionaire

IPO News

SpaceX says it plans to raise up to $75 billion when it goes public this month, setting the stage for the largest-ever stock market debut and putting Elon Musk on course to becoming the world's first trillionaire.

The company, formally known as Space Exploration Technologies Corp., said Wednesday it will sell 555.6 million shares at $135 a piece in an initial public offering. The estimated proceeds would easily top the $26 billion raised by oil giant Saudi Aramco in 2019. The offering would also give SpaceX a market value of $1.77 trillion. Only six companies in the S&P 500 are currently worth more, with Nvidia tops at $5.2 trillion.

Besides the size of the offering and the expected proceeds, SpaceX's amended prospectus updates details about how much control of the company Musk will have. As SpaceX's CEO, chief technical officer and chairman, Musk's voting power will come primarily through his ownership of 5.22 billion Class B shares, which give the holder 10 votes for every share held. According to the filing, Musk would have 82.4% of the voting power in the company.

Forbes currently values Musk's net worth at $826 billion and his stake in SpaceX at $542 billion. The estimated value of his SpaceX holdings was based on an overall value for the company of $1.25 trillion. Based on those numbers, a $1.77 trillion valuation for SpaceX would boost Musk's net worth by $223 billion, making him a trillionaire. However, much of Musk's worth is in stock that he has yet to cash in.

Even as it makes a bid for a blockbuster market debut, SpaceX is currently losing billions of dollars a year. The filing shows that the company lost $2.6 billion from operations last year on $18.7 billion in revenue, and the losses kept piling up at the start of this year, too.

Fantastical plans

Time will tell how SpaceX fares on the market. Musk's plans for the company are as fantastical as the money he hopes raise in the sale.

Colorful, even frightening in parts, the IPO document strikes a contrast with the typically dry, technical prose in IPO documents, detailing plans to use proceeds from the sale to help put men on the moon again and perhaps even Mars. In one section, it talks of a need to build "a permanent human colony" on the red planet with "at least one million inhabitants" as existential threats loom that could consign man to "the same fate as the dinosaurs."

Musk has almost equally ambitious plans for his other publicly traded company, Tesla. His goal is to transform the maker of electric vehicles into a producer of robotaxis and humanoid robots. Dan Ives of Wedbush Securities wrote in a research note that he expects Tesla and SpaceX to merge next year.

AI plays a key role

Key to the success of both companies — and any merged entity — is artificial intelligence. In its IPO filing, SpaceX says it sees potential revenue from AI of up to $26.5 trillion. But that depends on another lofty Musk ambition — putting data centers in space, which is not technologically possible at the moment.

Transforming his space company into a primarily AI-focused company will be a challenge for Musk, who started xAI in 2023 with 11 other co-founders who have all since left. Some were recruited away by rivals.

Its main AI product, the chatbot Grok, is "less impressive than anything that we see from any other major player in the space, whether that's OpenAI, or Anthropic, or (Google's) Gemini," said IDC analyst Arnal Dayaratna.

Dayaratna said that doesn't mean SpaceX doesn't have potential as a major AI player, thanks in part to its computing partnership with Anthropic and Musk's recent deal that gave SpaceX the rights to buy AI coding tool Cursor for $60 billion later this year. Folding in Cursor's capabilities would give SpaceX access to the coveted business customers now using Anthropic's Claude or OpenAI's ChatGPT.

SpaceX plans to use the net proceeds from the IPO to fund the expansion of infrastructure for its AI and rocket businesses, and to beef up the constellation of satellites that power Starlink Mobile, among other investments.

The company plans to list on the Nasdaq under the symbol "SPCX" and could begin trading as soon as the end of next week.

And SpaceX isn't the only colossal market debut investors are now bracing for. Earlier this week, Anthropic submitted a confidential filing with the U.S. Securities and Exchange Commission to officially start its own IPO clock.

OpenAI has not yet reported filing the initial SEC paperwork, but an IPO from the ChatGPT maker is widely expected.

"This listing represents the first major test for public markets after years of muted IPO activity with SpaceX paving the way for AI giants Anthropic and OpenAI to follow soon after," Ives wrote.

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Associated Press Technology Writer Matt O'Brien contributed.

New UH survey reveals concerns over AI data center growth in Houston

data findings

A new report out of the University of Houston shows that area residents remain wary of the long-term effects of operating data centers.

The recent survey from the University of Houston’s latest SPACE City Panel, conducted by the Center for Public Policy at the Hobby School of Public Affairs, shows that while 85 percent of Houston-area residents use AI, nearly 63 percent oppose the construction of AI data centers within 1 mile of their homes.

Respondents’ concerns centered around data centers’ high energy demand and the area’s power grid reliability. According to the survey, 32 percent of residents who oppose local data center projects would be more likely to support the centers if they relied on renewable energy over fossil fuels.

“Respondents understand that AI can bring economic and educational benefits, but they are also concerned about the physical infrastructure needed to fuel AI, especially data centers,” Soran Mohtadi, post-doctoral fellow at the Hobby School and a researcher on the report, said in a news release. “This physical infrastructure demands more electricity and water, leading to environmental impacts.”

Experts estimate that 6.5 gigawatts of data center capacity will be added to the Texas grid by 2030. And Houston’s data center capacity is predicted to more than double by 2028.

The Electric Reliability Council of Texas also projects electricity demand could reach 218 gigawatts by 2031, which would be more than double the record peak set in August 2023. Data centers are expected to account for 86 gigawatts of that new demand.

Survey respondents also said they are concerned about the state's future water supply, given the large amounts of water that data centers need to stay cool.

In terms of who’s responsible for that issue, 57.6 percent of respondents said they put the onus on Texas lawmakers, while 31.5 percent say tech companies should be responsible.

Additionally, more than 75 percent of respondents believed that data center developers and technology companies—not residents—should bear the cost of infrastructure upgrades to support data centers.

“Every decision legislators make has implications on residents’ everyday lives and local infrastructure now and in the future,” Maria P. Perez Arguelles, lead researcher on the report and research assistant professor at the Hobby School, added in the news release. “This issue is going to become more important in years to come, so this is just the beginning.”

Read the full report here.

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