To follow one with the series “How to beat the odds”, we look at another mistake that most entrepreneurs make in their businesses.
MISTAKE #2 – Irrational Exuberance = When optimism is on steroids
Irrational exuberance is the inability to ask the “RIGHT” questions or listen to the RIGHT answers. Many entrepreneurs in the beginning spend many weeks, months and sometimes years, developing their business concept and ideas. Finally, after many sleepless nights and from the encouragement of family and friends, we develop a sense of “motivation” or “optimism” for our business – “Yes, it’s the best things since sliced bread!”, “It’s totally going to happen”.
Some entrepreneurs take it to the next level, a level of so much love for your business concept, too much optimism of the business working and that we’re going to make lots of money – that so called “passion” becomes too much, like optimism on steroids. The danger of irrational exuberance is that the “optimism” and “passion” turns into a blindfold, when the entrepreneur ignores risks, and turns into a turns into a huberous ego, bulletproof, with an inability to see what’s in the blind spots. Where they are always needing to be right and not asking for help. Even when the odds are up, the business doesn’t seem to be working, the “optimistic” entrepreneur will not listen to any advice from others. Being optimistic is great, having that motivation and energy to make something happen is the best feeling ever. However, we need to understand exactly how far we are and how absorbed or ‘in love’ we are with our product or business to figure out whether we are not seeing the bigger picture.
Keith Cunningham says,
“YOU CAN BE RIGHT OR YOU CAN BE RICH, BUT YOU CANNOT HAVE BOTH, PICK ONE!”
Successful entrepreneurs spend most of their time figuring out what can go wrong with the business, NOT spend time thinking what they can do right. Spending more time to identify risks will give us a better understanding of the problems that may occur in the future and we use this knowledge to mitigate, get rid of, or manage the issues before it arises.
Just think of the pain in taking too big of a risk without knowing, failure from unforeseen or not thought projects and lose copious amounts of money on simply being overly optimistic and not having a BACK-UP plan! Not having a second plan, a second product or the next project to work on and this leads us to the next mistake
MISTAKE #3 – Fail to have a second Idea
“Success lulls people to think they know a lot more than what they really do” – Bill Gates
Understand this, the market is always right. If the market is not responding to your product or business, is it because it has not been marketed well, or is it just not the right product for the market?
THINK = Business is an Intellectual Sport VS Emotions (Or Gut)
Keith Cunningham defines the acronym of “G.U.T.” as “Gave Up Thinking”. He stated that feeling is the problem. In business we don’t use intuition, we use your head to intellectually strategise your businesses future.
“Ignorance when mixed with greed is the stuff financial disasters are made of” – Warren Buffett
What went right this time, does not necessarily mean it will work again next time. The roulette ball landed on 15 today, doesn’t mean it will land on 15 again tomorrow.
A business owner thinks carefully of what the business is. What it does, how it does it and why it is done in a certain way. You should be able to predict exactly how much return you will be making in the next few years and set budgets for each part of your direction. You need to look at your market and really look at what is missing and what are potential business concepts you have to sell. Not looking carefully at what can go wrong with your business is like buying a second hand vehicle without getting it checked first.
Spend time on yourself and invest in educating yourself to learn and grow your business tool kit, develop your skills, and learn new strategies so that you can embrace change. Change is inevitable – people, politics, your competitors will change and you need to be prepared for when it does.
Make mistakes. Make many many mistakes so that you learn from your problems and develop higher quality solutions. The more you learn to solve your problems, the more high quality your problems becomes. Think of it as a game with levels, push through each level until you are facing a problem at level 115 which means you’ve been able to solve all of the other 114 levels of problems – imagine living a life where you’ve solved so many high quality problems, just think of how exciting your next set of problems must be!
Finally, it is a great idea to schedule in some “thinking time” in your calendars to really think through your actions before you consume optimism in high doses. Just because you are super dooper happy about your business idea doesn’t mean it is going to be a successful business.