Executive Book Club

4 books about success and failure everyone should read, according to a founder who sold her company for millions

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Vicky Tsai never thought of herself as an entrepreneur.

She earned an economics degree from Wellesley College before becoming a credit derivatives trader at Merrill Lynch, where she was working in one of the World Financial Center buildings the morning of September 11, 2001, near the Twin Towers.

The events of 9/11 propelled Tsai to recognize a life working in finance wouldn't make her happy, so she attended Harvard Business School to help her figure out what would come next. After stints working for both international brands and Silicon Valley start-ups, "I felt morally bankrupt," Tsai tells CNBC Make It.

So she left.

"I didn't quit with the intention of starting this company," she says, referring to her skin care company Tatcha, which she founded in 2009. "I quit with the intention of trying to figure out how to be happy. And in doing so, I ended up finding something that inspired me, and that led to me creating the company."

Tsai came up with the idea for Tatcha during a layover in Japan. At the time, she was suffering from acute dermatitis and was drawn to the generations-old beauty rituals of geishas, which focus on a straightforward routine with simple ingredients. Tsai set out to create a direct-to-consumer line of similar products free of parabens, synthetic fragrances, mineral oil and other potentially irritating ingredients.

The luxury skin care brand with fans in Kim Kardashian and Meghan Markle would go on to make an estimated $70 million in sales in 2018, according to investment bank Bryan, Garnier & Co., and reported by Bloomberg. It was acquired by Unilever during summer of 2019, for a deal approaching $500 million, WWD reported citing industry sources. (The company declined to comment on the terms of the sale or its annual sales figures.)

During the decade-plus period of building her company, Tsai says she turned everywhere for guidance, including books from people who'd done it before.

"I love reading about the real stories of other entrepreneurs," she says. "Not the glossy version you get sometimes in short form, but the truth of what happened. Then you realize it's hard for everybody, but it's worth it."

Here are her four favorites that she recommends.

1. "Shoe Dog," by Phil Knight

"The best one I've read is Phil Knight's 'Shoe Dog,'" Tsai says of the memoir by the Nike co-founder. The book covers Knight's experience launching Nike under the name Blue Ribbon Sports in 1963 with a $500 investment from his former track coach, Bill Bowerman.

Eventually, Nike became the No. 1 athletic brand, with an estimated $15 trillion brand value. But throughout the decades, Knight writes, his business moves always attracted naysayers.

"We knew we could fail, we just didn't think we would," Knight told CNBC's Jim Cramer in 2016. "We loved doing what we were doing, and we loved each other."

Bill Gates even recommended the memoir as one of the best books of 2016, and described it as "a refreshingly honest reminder of what the path to business success really looks like: messy, precarious and riddled with mistakes," Gates wrote in a review.

Tsai says she prefers reading about the messiness of starting a business. Her own journey launching Tatcha includes selling her engagement ring, moving back home with her mom, barely affording groceries and racking up close to $1 million in debt across student loans and credit cards used to float the company.

The founder didn't take a salary for the first nine years of running Tatcha and chose to instead reinvest earnings back into the company, she says. She only recently started paying herself.

"Every time I get a paycheck, it feels like I've won the lottery," she says. "It's amazing."

2. "Let My People Go Surfing," by Yvon Chouinard

Tsai credits "Let My People Go Surfing" by Patagonia founder Yvon Chouinard for guiding how she approached building her own beauty company.

"When they started Patagonia, they started growing really quickly, and at some point they felt it was coming at the expense of what made them Patagonia," Tsai says. As a result, Chouinard made the decision to slow the expansion of his business and pull the growth rate down. "I think they're going to outlast the other brands in their industry because of that maniacal focus on controlled growth," Tsai adds.

Patagonia did not immediately return a request for comment. 

Tsai says these lessons from the outdoor clothing company informed her decision to expand Tatcha's reach gradually, which is why their only retail partner is Sephora.

Chouinard's book also focuses on Patagonia's philosophy to give employees freedom to set their own work schedule, and outlines the founder's belief in building an authentic business and becoming a socially-conscious entrepreneur.

3. "Delivering Happiness," by Tony Hsieh

Another book Tsai recommends is Zappos founder Tony Hsieh's "Delivering Happiness." The online retailer is known for its focus on company culture, which translates both to the customer experience and the employee experience.

Tsai says paying attention to culture fit has been crucial to growing Tatcha and building its products with customers in mind. It's her biggest priority when she's interviewing executive-level candidates to join the company.

"We've had a lot of people with great skills come to the company but not make it very long," Tsai says, adding that employees who focus on office politics or their own career narrative over the needs of the company and its customers don't succeed within the organization. "On one hand, we're of course hiring for skill sets, but I've learned my lessons hiring for skill sets without prioritizing culture fit as much," she adds. "And for us culture fit is about humility, pursuit of excellence, teamwork and authenticity as a human being."

4. "Pour Your Heart Into It," by Howard Schultz

The first job Tsai took out of Harvard Business School was with Starbucks, which is how she comes to recommend former CEO and current chairman Howard Schultz's "Pour Your Heart Into It."

"I have read it four times," Tsai says. "Once before my first interview with Starbucks, once a year into my job there, once when I was starting my own company and once more again recently as I prepared to hand over the reins at my company to the next generation of leadership."

The memoir, which Tsai says she's "highlighted and dog-eared to no end," covers Schultz's journey from growing up poor in Brooklyn, New York, to buying the Seattle coffee franchise in 1987 for $3.8 million with the help of investor dollars. He then grew the company from a handful stores to more than 24,000 locations in over 75 markets.

"Before Starbucks, I thought about my career as a daisy chain of jobs that would hopefully add up to a respectable resume and a good living," Tsai says. "After Starbucks and now Tatcha, I believe in the idea of a life's work and that business can and should make a positive impact in the communities we serve."

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