Business success = failure + quitting

Michael Jordan shooting
Michael Jordan shooting

It’s the finals at a World Championship and everything depends on this one shot you’re about to make. TV camearas are broadcasting your success – or failure – to billions of people. The fans are roaring, your coach is holding his breath, and you know your father’s watching. Your heart is pumping crazy, your hair’s wet with sweat. You have a split second to decide what to do – shoot or pass? Shoot or pass? SHOOT OR PASS?

In a flash you remember the quote, “You miss 100% of the shots you never take.” You shoot.

You miss.

FAILURE HURTS

This was just an imaginary scene, but you still cringed when you read the words “you miss.” That’s how much failure scares you.

Don’t worry, it’s not just you. It’s 99% of the people. According to a study, losing 200€ hurts more than gaining 200€ makes you happy – i.e., finding 200€ on the street will make you happy for an hour, but losing 200€ on the street will make you miserable for a day.

If you are like most of us, you focus your efforts on preventing failure rather than achieving success. Given the opportunity to start a business with an equal chance of 3000€ in profit or 3000€ in loss, you’d prefer not to lose the money, meaning not stating the business at all. That’s called Fear of missing out and it’s holding back 99% of the people. They don’t shoot, they pass.

The 1% includes people like Michael Jordan:

I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life.

And that is why I succeed.

TRIAL AND ERROR

Professional photographers make hundreds of photos before picking one for processing. Dancers misstep hundreds of times before getting it right. Stephen King paper-balled countless drafts before his breakthrough novel “Carrie”. (Got $200 000 out of it!)

The old trial and error method is the best tool for success, but too many people are afraid of the “error” part of it.

Not King! “Carrie” came to life thanks to all those characters King created before her and who were not good enough to survive. (Or earn him $200 000!) He was able to create Carrie because he was not afraid to practice, make a mistake, practise more, repeat.

Instead of aiming for just one big perfect story, King got busy writing down hundreds of stories, even though he knew they won’t be perfect. Had he waited for the perfect plot and characters before he laid a single word on the sheet of paper, he’d be nobody today.

Stephen King didn’t practice his writing locked in a dark room, away from everybody so nobody would see his – by his own words, “mediocre” – first drafts. He also knew that his own judgment for editing would be insufficient because it will rely on his own biased assumptions. He needed feedback from those his writing was meant for: his readers.

Imagine two young entrepreneurs who are just starting their businesses and are about to make their first telemarketing call.

Businessman А drafts the main points in his presentation and starts calling right away to test his script; then, based on client feedback and reactions, he adapts the script as needed.

Businessman B also drafts the main points in his presentation. Then he starts thinking whether he should start with “Hello” or “Good morning”, whether he should say “offer” or “proposal”, and whether he should talk discounts now or later. He thinks everything through in his head before making his very first phone call.

And this is what most people do, they act like Businessman B. They over prepare and postpone that first call for as long as possible. Their fear that this call may not go smoothly – that they will stutter, get a cranky client, or get hung up on – is holding them back from taking action.

Now, if we compare the first call of A and B and analyze them, we’ll find that Businessman B’s first call is better than Businessman A’s first call because B has dedicated more time preparing his script.

At this point, it seems like B has a head start.

However, if you look past that first single phone call, you’ll see that while B’s still preparing for his first “perfect” call, A has already made 100 “imperfect”, but real calls. While B is preparing his first presentation based solely on the assumptions in his head, A already has real feedback based on customer reactions. When A makes changes to his presentation, he doesn’t just guess what’s going to work and what’s not – he knows it because customer reactions have told him so.

Also, at the 100th call mark, A’s presentation will be better that B’s, even though at this point they both have the same amount of feedback. Why? Because the more hours you invest preparing your presentation, the harder it gets for you to change it – and B has already dedicated too much time to his initial script.

According to David McRaney, “Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.” (Src.: youarenotsosmart.com)

McRaney illustrates this using the Farmville game, where players create and run virtual farms. He says Farmville has 50 million players not because it’s such great fun, but because when they get tired of it, people think about how many hours (and sometimes money) they have spent on it. So they have a hard time dropping these “investments”.

LET THE F*CK GO!

We often rationalize our bad decisions by the mere fact that we have invested too much time, effort and emotions. That’s why when a sophomore realizes she doesn’t really want to become an accountant, she keeps at it and doesn’t just drop it to pursue a career in dancing. That’s why when the guy who’s been running a restaurant for five years gets hit by the recession, he has a hard time shutting down the business. (“Throwing good money after the bad” when he should have Killed a darling.)

Small business owners are emotionally attached to their business. They love what they do, and if for some reason the business hits a downward spiral, they have a hard time letting go.

Say you’ve owned a very successful flowershop for 10 years. You love flowers, you love talking to the blushing guy who buys a buket for his girl, you know what your customers want and why. You’ve been making really good money.

Then something happens and you are forced to close shop. Only you don’t. You can’t! Okay you can, but you don’t want to.

You have saved up enough money to start another business. A thrift shop. Selling cars. Web desing. But you’re afraid that despite you being a great business woman when it comes to flowers, you’d suck at another type of business. You’re thinking, “If I drop this business now, what will I do then? The flower business is everything I know.” Which is probably true, but how is pouring money into a dead business going to help you?

Let the f*ck go.

It’s the skill to quit on time, without shame or regret, that plays a key role for success in business.

Quitting on time of course doens’t mean quitting at the first obstacle you run into. Just the opposite – good businessmen have the ability to chase after their goals with great amounts of energy and dedicaction. But if those goals turn out to be a dead-end, they prefer to stop as soon as possible. That way they are not wasting their energy over something that doesn’t really hava a future.

Psychology professor Gregory Miller says:

“There’s this traditional idea in Western culture and science literature that being persistent is good, that if you work hard, you can achieve anything. Our take is that persistence is good, but there are times where the most adaptive thing is to say, ‘This goal is not going to work out.’ ”

Src.: http://www.nytimes.com/2007/12/09/magazine/09quit.html?_r=1

SUCCESS IS A STATE OF MIND

Say you have a burger shop and you are determined to make it a profitable business. You burgers are home-made, accurately priced, and your place is clean and cosy… only it’s really not on a mainstreem street, and you’re not getting enough customers. Those who do walk in the door love the bun but hate the grilled patty.

At this point, you might think that being persistent is keep doing what you’re doing and thinks will work out. They won’t because being persistent is not about being stubborn.

You have to be determined, but that doesn’t mean you should be stubborn at doing something that doesn’t work, as many people think. No – being determined is about keeping your eyes on the goal while admitting that something doesn’t work, then quitting what doesn’t work and starting a new way towards the same goal. In the above example – changing the location of your business and adapting your burgers recipe according to customer feedback.

Adopting the recipe could be both really easy or really hard. It could be hard if you are too emotional about it, like if it’s your grandma’s recipe that you really love, or if you set out to be “different” than the conventional burger place and changing the recipe would be against your motives to start the business in the first place (being different).

But if your business won’t work your way, you have only two choices: shut down the business or change your way. Both choices include you admitting you have failed in one way or another.

It takes character to succeed in business an get rich. Strong character to admit and accept your failues and still be in a good mental state. If you let a failute disturb you and bring you down, you will never have a business that’s making you money.

The true way is to know you are better than your circumstances and better than your failures. You need to have confidence in yourself that you can overcome your failures and that your quitting doesn’t define you. It’s just a piece of the process.

I met this guy recently who lost his job in the recession. He took it way too personally and was really depressed, feeling down.

A successful person would just take the failure for what it really is – something incidental. His thinking would be, This didn’t work, let’s analyze it, okay, now let’s make changes and move on, end of story.

The most important thing about failing or quitting is to NOT let it crush your spirit. If you let it crush you, then that’s the real failure.

I BLAME THE SCHOOL SYSTEM

Kiyosaki said that in school, A-students are better than B-students but in life, it’s B-students who run businesses and A-students work for them.

Many people – especially good students – mistake their academic good grades for success. But good greats don’t mean sh*t.

Typically, A-students come from richer families and better backgrounds compared to B-students, so they are easily encouraged to focus on their studies. Everything withing the family’s power is arranged so that these students are not distracted from their primary goal of getting good grades.

But success is not when you have everything easy and you achieve stuff. Real success is when you have it hard and still achieve stuff without getting discouraged. Sometimes, a B-student works for her B’s much harder than the A-student works for her A’s. School grading is based on how well you do a test, not about how much effort it took you to get there or how persistent you were.

To be successful in business, you need to be determined and you must know how to pick yourself up after a failure. You need to know when and what to quit, and you need to know when to push forward just a little more.

No wonder B-students are better at business! They have learned how to deal with failure early on, and arguably they have better social skills than A-students.

I read a story once, about two guys.

One is a poor lazy janitor who wins the lottary but spends stupid. Because he is still the same poor, lazy, unsuccessful man in his mind, he blows the money away and ends up back where he started.

The other guy is a hard-working businessman. His business fails overnight and he loses everything. But, while building his business the first time, he has also built the character and strength not to despair. So he starts over – working at Burger King, pouring his energy into getting back on his feet. Eventually he starts another business and is rich again.

Both men are back where they started – one in a bad place and another in a good place.

Suzanne Lucas over at CBS News says,

“The ability to bounce back from failure is a key point. But, what if you’ve never failed? What if your parents fix every problem you ever have? What if you never gain this valuable skill? Then you’re far less likely to have true success. If you’ve never had to try again and again, are you going to assume that the problem is unsolvable if you fail the first time?

Lots of people live charmed lives as long as their parents are pulling the strings or they put themselves in places where success is almost guaranteed. [..] And what happens if you’re one of those people who has never failed? Never had to face disappointment and pick yourself up by your own bootstraps? It can be disasterous.”

FROM FAILURE TO SUCCESS

So how do great businessmen have the courage to keep trying new things, even though their last business ventures have been failures?

Thomas Edison said:

I haven’t failed. I’ve found 10000 ways that don’t work

10 little failures – or even 10 000 – is better than one big failure. First of all, little failures are never fatal; second, ten little mistakes will teach you a lot more than one big mistake.

Great businessmen micro-tests their assumptions all the time. A lot of these assumptions prove wrong (“low prices always bring in more profit”), but on the bright side, whenever something works, they know it really does work. No exceptions.

Failure is part of testing, which is part of success. Great businessmen don’t listen to witty sayings like “Quitters never win, winners never quit.”

Although according to Seth Godin, there is another side to that coin:

“A woodpecker can tap twenty times on a thousand trees and get nowhere, but stay busy. Or he can tap twenty-thousand times on one tree and get dinner.”

The trick is to quit the right thing at the right tine.

Those rich, successful businessmen always know what to quit. And when.

And how.

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