Sam Adams founder explains how 2 books helped him build a billion-dollar company

When Jim Koch left a comfortable career at Boston Consulting Group in 1984 to start the Boston Beer Company, his father told him he was making a terrible mistake.

The Kochs are a family of brewers, but Koch's dad thought the idea of trying to enter an industry dominated by brands like Budweiser and Coors was destined for failure.

Koch, however, started by aiming at a niche market. Today craft beer is experiencing tremendous growth, and the Boston Beer Company, led by its Samuel Adams brand, is at the head of the pack. It has a market capitalization of $3.2 billion.

Koch told Business Insider he's a voracious reader, and two books stand out when he considers their influence on his approach to business. He's used both of the books below to develop a philosophy of prioritizing customers over shareholders and using constant innovation as an advantage.

"Out of the Crisis" by W. Edward Deming

Deming was an American statistician who spent a decade in Japan after World War II. His lectures, consultation, and training contributed significantly to the country's postwar economic boom and the emergence of fine Japanese products on the global market.

In 1951, the Japanese Union of Scientists and Engineers created the Deming Prize for exceptional achievement in industry, but Deming didn't gain notoriety in the US until the '80s.

His 1986 book "Out of the Crisis," which Koch said is written in charming colloquial language, outlines 14 management points that advocate for the need to forecast, stay innovative, and empower employees.

"Long-term commitment to new learning and new philosophy is required of any management that seeks transformation," Deming wrote. "The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment."

Koch said he takes this approach to his business, ignoring the daily ups and downs of the Boston Beer Company's stock price and prioritizing long-term growth over short-term results.

"So I'm worried about, where are we in two years? In five years? How do I make this the best, strongest, healthiest company I can?" Koch said.

"The Structure of Scientific Revolutions" by Thomas S. Kuhn

The late physicist's book recently enjoyed an uptick in sales after Facebook CEO Mark Zuckerberg included it on his "A Year of Books" reading list.

It has become "one of the most cited academic books of all time" since its initial publication in 1962, establishing Kuhn as "perhaps the most influential" philosopher of science in the 20th century, according to the Stanford Encyclopedia of Philosophy.

Kuhn's book is best remembered for introducing the phrase "paradigm shift," representing instances in scientific history when a perspective was fundamentally shifted, like when quantum physics replaced Newtonian mechanics.

The paradigm shift theory can be applied to aspects of business as well, such as the way Americans expanded their beer consumption past huge brands like Budweiser and Heineken over the past two decades.

"The Structure of Scientific Revolutions" helped Koch "think about removing the blinders and not think within constraints," he said.

"To be able to say, 'I know this is the way the world is, but why can't it be different and better?'"