Books every entrepreneur should read in 2022 (and why):

1/ Thinking Fast and Slow

Lessons:

• Probably the best book written on human behavior

• You will learn how to be aware of your own bias

• Make better decisions by understanding your blind spots

2/ The Innovator’s Dilemma

Lessons:

• Why big companies miss disruptive innovations

• Big companies demand quantification of market size

• Disruptive markets in their infancy can’t be quantified

3/ Zero to One

Lessons:

• Competition is for losers

• Monopolies are actually good

• Large TAM’s are overrated

4/ How to Win Friends and Influence People

Lessons:

• Business is about people

• You’re selling to people (customers) or hiring people (employees)

• This book helps you get better at both

What is EBITDA?

Why is it important?

1/ What does it stand for?

EBITDA is an acronym that stands for:

Earnings
Before
Interest
Taxes
Depreciation
Amortization

2/ Not a GAAP measure

EBITDA is not a number that you will typically see on a company’s financial statements

It’s a measure that companies calculate separately in a 10K filing or one that you could calculate yourself

3/ What does it mean?

You probably have a good idea of what “Profit” is

Profit is what is left over after deducing expenses from a
company’s revenue

EBITDA is an adjusted measure of profit

You can calculate it as follows:

1) Start with Net Profit

2) Add: Interest, Taxes, Depreciation, Amortization

3) The result is EBITDA

STOP focusing on Profit

START focusing on Cash Flow

Cash Flow Statement 101:

Every company has 3 reports in its financial statements

1. Balance sheet
2. Income statement
3. Cash flow statement

Most people focus on the Income Statement to look at PROFIT

There is nothing wrong with this…

But profit, isn’t CASH FLOW

Profit is an accounting measure

It doesn’t tell you how much MONEY actually came into the business

Sounds confusing?

Let’s look at an example:

In 2021 Google’s profit was: $76 billion