Gamblers Who Don’t Gamble

 
Entrepreneurs are gamblers who don’t gamble and risk takers who aren’t risky.

Sparked by curiosity, entrepreneurs explore farther and wider than most people but they aren’t reckless (at least not the successful ones).

RouletteNothing happens without ideas, and curiosity is what leads to the best ideas. You have to go through a lot of ideas before you find that magical one that both excites you and works. That search can sometimes take a lifetime and the search is what many people don’t understand about entrepreneurs. In my interview with Gary Vaynerchuk he said he has ideas “24/7.” But he doesn’t blindly follow all of them or most of them or even some of them. He said that if the idea sticks around for a while, just won’t leave his mind, then he’ll follow it.

Which takes me to the idea of risk. Acting on any new idea has risk associated with it but there is a difference between being risky and taking a risk. Being risky is just doing it without much thought or planning. Taking a risk is researching, learning as much as you can, turning the unknown into the known so that surprises are minimal, and then going for it. One approach is dangerous the other is smart.

A lot of people confuse this penchant for risk as gambling but gambling is a loser’s game, gambling is a game of chance and successful entrepreneurs work hard to reduce chance. You can’t eliminate chance but there comes a tipping point when risk has been reduced to the point that action makes sense. This is why I put the following quote in my book: “I have always found that if I move with seventy five per cent or more of the facts that I usually never regret it. It’s the guys who wait to have everything perfect that drive you crazy.” That was Lee Iococca, the former CEO of Chrysler and that is the difference between someone who sees entrepreneurship as risky, as gambling, and someone who understands risk and works to make it less risky.

The person who has to wait until all risk is eliminated will never be an entrepreneur, and the person who rushes in without thought or preparation won’t be successful, but the balance between these two extremes puts the odds in your favor. It’s why I ask What Next and why I work hard to answer that with facts.


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Entrepreneur Cheerleaders

 
EasyReally this is about entrepreneur cheerleaders and success cheerleaders, people who sell hope and, this is the important part, make it sound easy. I’m a realist and nothing worth getting is easy. It might be enjoyable but it’s not easy. These cheerleaders remind me of the Geico commercial with Pinocchio as a motivational speaker, as he points to people he says have potential, his nose grows. Not everyone is going to be a wild success, not everyone can run a successful business. If a cheerleader like Anthony Robbins was Pinocchio his nose could hurt someone.

I’m not saying that having confidence is a bad thing or that being positive is a waste of time, I’m not telling you success isn’t worth working toward. I’m an advocate for curiosity, for adventure, for pushing yourself to your limits in order to discover what you’re good at, to find what excites you. Do all of those things but understand what you’re getting into, what you’ll likely face. I saw a tweet yesterday that is appropriate here:

DefyOdds

Successful people are very good at managing risk, at understanding the odds and finding ways to tilt the odds in their favor.

You might think you’re good at that too and that’s where self-awareness comes into play. The cheerleaders out there will tell you you’re great, that everything will work out if you just believe but that’s not necessarily true. Belief only gets you so far.

This is why I’m a big fan of Gary Vaynerchuk, he puts a lot of value on self awareness, he’s not a cheerleader in the sense that he’s honest with himself and has no problem being honest with his advice.

Listen to the cheerleaders for inspiration, get fired up, but then get real. Look at your What Next from every angle and anticipate as many problems from the start. Be an optimist in the dream phase and a pessimist in the implementation phase.


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Diving in the Shallow End

 
http://www.dreamstime.com/stock-photos-girl-diving-pool-image2866893Are you conservative or aggressive? Are you more Warren Buffet or Richard Branson? Is one of them reckless and the other careful?

I say they’re more alike than you think.

It comes down to a topic I’ve touched on several times – risk. Both take risks but they are not risky – they find ways to minimize and manage risk.

Risk in business is like a swimmer approaching a pool. Diving into the water is not a risky thing on its own but diving into a pool with an unknown depth is.

Doing your research, finding out the depth of the pool, then planning your entry is how you minimize risk. The angle of entry is how you manage risk. What neither Warren Buffet nor Richard Branson do is dive in the shallow end, the risk is too high. Instead they seek out the deep end. The deep end offers the most benefit with the least risk. It might still be dangerous but it’s less dangerous.

Of course once the research is done and the decision is made you still have to dive in and that’s what a lot of people don’t do, or wait too long to do and miss out on the opportunity. Once the key information is determined you have to move. Like a quote I used in the chapter called Risk in What Next, Lee Ioccoca, former CEO of Chrysler said: ““I have always found that if I move with seventy-five percent or more of the facts that I usually never regret it. It’s the guys who wait to have everything perfect that drive you crazy.”

So avoid diving in the shallow end but do dive in!

 


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In This Order

 
In my first post on The RFR Principle there were three words that I think are really important: In This Order. The full quote is: “The RFR Principle says that three elements are necessary for success and they are, in this order, Risk, Failure, and Reward.

Why that order?

First comes the risk because without action, without doing, there is no risk, so risk has to come first.RFR

Failure must be next – it’s the buyer’s remorse that comes from making a decision, the worry and doubt that creeps (and sometimes speeds) in. But it’s so much more than that. Failure is the unanticipated details that come with starting something new, the deflation that follows confidence, the obstacle that from a distance only looked like a bump in the road. Nothing is flawless. No plan, no matter how well thought out and how adeptly executed, is perfect, and that is why failure must be next. The good news is it’s rarely fatal as long as you deal with it quickly and calmly.

Reward comes last and is the most tenuous of the three. It’s often not as great as expected and comes later than anticipated.

Because the RFR Process is perpetual, once the initial cycle completes, all three elements can occur simultaneously. Like electrons speeding around a nucleus, Risk, Failure, and Reward all circle Success and it’s up to you to influence their speed and trajectory.


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The RFR Principle

 
The RFR Principle says that three elements are necessary for success and they are, in this order, Risk, Failure, and Reward. The RFR Process is the continual movement of these three elements.

RFRTo quote Yoda “Do or do not. There is no try.” Doing however takes risk. Staying in bed never making an effort has no risk but also no reward. Starting a business, applying for a new job, asking someone out, all involve risk. Some risks have a high price tag and it’s those that some avoid, others rush into, and still others plan and approach sensibly.

Failure is a an option, it’s also unavoidable. Failure is not the opposite of success in spite of everything you’ve probably been told. Failure is merely a setback. You’ve taken the risk, asked the love of your life out on a date and when you try to pay your credit card is denied. You think it’s over, that she’ll never go out with you again – it feels devastating in the moment but it’s unlikely to be your last date.

Finally the last part of the RFR Principle is reward but rewards are not permanent. If you’ve taken the risk, had setbacks, failures that you thought would end it all, and still came through, then you’ve reaped the reward but it won’t last unless the process is repeated. Too many people look at the success of a reward as an end, a goal to be achieved, but it’s really just a rest stop on the hike of life.

All three elements of success revolve around each other. If one stops the whole process breaks down. Keeping those elements in motion is the willingness to ask What Next, the ambition to overcome complacency, the strength to face obstacles head on.


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Embrace the Complexity of Options

 
Anthony RobbinsIn a post a long time ago (one of my first) titled “Oh No” I lamented the fact that I was just another motivational author or speaker and I was not happy about it.

I think the reason I don’t want to consider myself a motivational author or speaker is that they are too simplistic in their approach. I, however, want to embrace the complexity of options. Take a simple concept like fear. I just read an article about Anthony Robbins saying how fear holds you back from success and while I’ve written about that very topic, I’ve also written about the benefits of fear. It’s too simplistic to say fear=bad and courage=good but that’s really all Anthony Robbins is saying, and most motivational speakers say.

I keep coming back to something Scott Loughmiller said in What Next, “I don’t take risks I manage risks.” And that concept can be applied to everything: I’m neither afraid nor fearless, I manage my fear; I’m neither under confident nor over confident, I mange my expectations. The fear is there, the lack of confidence is there but we push through it and yes the lack of fear can be dangerous and over confidence can get us in trouble. We constantly fluctuate between emotions and that’s ok as long as we manage to make progress.

This also ties in well with what Gary Vaynerchuk told me when I interviewed him in 2013, that self-awareness was the most important trait for success. If you are honest with yourself about what’s holding you back, you can begin to manage it.

Anthony Robbins and his ilk are the sugar rush of success, it’s a nice rush but it won’t last. Simple sells very well for them, but life is complex and requires complex solutions together with lots of work. Go to a motivational speech or read a motivational book and you’ll feel good for a while. Become self-aware and manage your issues and you’ll be well on your way to sustainable success – but like anything it takes work.


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Is Gary Vaynerchuk a Risk Taker?

 
After a short break I’m back to my interview with Gary Vaynerchuk. There was one question I asked Gary that I wish I had followed up on more extensively, explained a little better and really discussed. With limited time, however, I chose to move on.

Warning! Risk AheadI asked Gary if he felt there was a difference between taking a risk and doing something risky. He didn’t see the distinction. It is subtle but it’s there. At just under 90 seconds this is the shortest clip from the interview but perhaps my favorite topic. Take a listen here:

Vaynerchuk Risk

Gary notes that he thinks someone who takes risks is dramatically happier but goes on to say that he doesn’t consider himself a risk taker. I have found that many highly successful people who other people describe as risk takers or gamblers disagree with that characterization.

In my book, What Next, I talk about risk and what I discovered is that the distinction between taking a risk and doing something risky comes down to management. Scott Loughmiller, an entrepreneur I interviewed for the book, said he doesn’t consider himself a risk taker but rather a risk manager.

When we look at the decisions of the highly successful we only see two points in time. The decision to act and the end result. What we don’t see from our perspective is the thought process, the many sub-decisions, the careful deliberations and strategizing that goes into what seems like a risky endeavor.

And that brings us to the difference between success and failure when it comes to risk. So many people don’t take the time for careful deliberation. So many people rush into really big decisions ill-prepared. That is doing something risky. On a personal level you need look no further than retirement planning. So many people put that on autopilot without enough thought.

When it comes to business, too many people put too much weight on the advice to follow their heart. That’s good advice but it must be backed up by resources, planning, and a strong dose of reality. Doing the research, exploring the many possible outcomes before acting is taking a risk but it’s not being risky and that is a huge difference.

Are you a risk taker or do you do risky things? Share some examples and your thoughts in the comments below.


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Gary Vaynerchuk Knows Himself Well

 
It’s no secret that I believe strongly that curiosity is essential for success. If you read this blog or read my book, you’ll find curiosity hailed throughout. You will also find that I speak of other traits that amplify curiosity and lift ordinary success to higher levels. Those traits are a sense of adventure, willingness to try things, a healthy understanding of risk, and self-confidence, to name the ones I think are most important.

Gary_1In my interview with Gary Vaynerchuk he added one trait to this list that is often needed to balance out the others, that trait is self-awareness. You have to be a good judge of your own strengths and weaknesses and that requires self reflection. Listen to the conversation about self-awareness here:

 Vaynerchuk SelfAwareness

In my book, What Next, I interviewed an entrepreneur, Scott Loughmiller, who, when I thanked him for answering the questions so thoroughly said, “That’s ok I like this self-reflective kind of stuff.” That’s why he’s successful, because he is able to take stock of his own abilities and concentrate on the things he’s good at while hiring the people to do the things he’s not.

Loughmiller was trained as a programmer, a coder, but he doesn’t code much any more because he has the bigger picture to worry about. He knows there are people who are better at coding and can devote all their energy to it so that he doesn’t have to spread himself too thin and micromanage the project.

Gary said something that I suppose would sound ridiculous to a normal person. He said there was a time that he thought he should win an Emmy, Tony, Grammy, and Academy Award, really believed that he had it in him to do it. That made sense to me because I’ve had those grandiose ideas myself (In What Next I call them delusions of grandeur). It was self-awareness that brought Gary back to reality.

Do you take the time to think about your strengths and weaknesses? Do you understand yourself more than anyone else? If not, why not? Please share your thoughts in the comments below.


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Yin-Yang of Confidence and Fear

 
In What Next I relay the story of how Julie and I decided to buy an investment property in California but what I left out was how perfectly we compliment each other, how we balance each other. When Julie was feeling apprehensive about this big decision I was confident, calm, and reassuring. When I began to have doubts, wondered if we were making a mistake, Julie took the role of the voice of reason and strength.

Confidence and FearJulie was the Yin to my Yang as I was hers. What I’m seeing now, in a painfully real way, is that the Yin and Yang are within us as we fluctuate from confidence to fear and back again. As I move closer and closer to opening my spa, with all the details that need attending to, I cycle through the range of emotions. It takes a toll.

In Adversity on Purpose I talk about how successful people seek out difficult situations, investments or business opportunities for example, in spite of the risk and the obstacles in their way. They do this because they know that what lies on the other side of the struggle is success. I know that, too, but the cycle is unavoidable.

If all I had was confidence, where would the attention to detail come from? If I was sure things would work out, why would I check and double check my progress? It’s the fear, the worry, the concern, that keeps me on track. Conversely, without confidence, why wouldn’t I just give up? Without belief in the prospect of success, why would I be so dedicated? It’s the faith we have in our own abilities that drives us forward.

The confidence and fear cycle goes on but compliments each other as we continue forward over obstacles and up hills. How have you used this dichotomy to your advantage?


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Adversity on Purpose

 
Overcome adversityOnce again my inspiration comes from a tweetchat and once again that chat is #BeALeader (Thursdays @7pm ET). The topic last night was adversity and the conversation was focused on overcoming adversity and getting through tough times. We also recognized that adversity develops character and strengthens us.

This post is not about overcoming adversity but seeking it out, on purpose. The most successful among us do it all the time. Anyone who is fed up with their job and begins looking for a new one is choosing adversity, the interview process and the chance they won’t get the job. Yes, it’s true they might be replacing one adverse situation with a more promising adverse situation but make no mistake, they are seeking adversity.

Those who embrace the mantra, go big or go home, may fail big but they may also succeed big. Choosing adversity comes down to your risk tolerance. Is risk something to be feared or embraced? When I speak of risk I’m talking about educated, calculated, researched risk, the kind successful people take as opposed to the kind unsuccessful people take, foolish risk.

I have chosen adversity every time I’ve made an investment or started a business. I choose adversity when I attempt to overcome my phobias. We choose adversity every day we get out of bed even though we do all we can to minimize it. I’m all for minimizing and even avoiding adversity when possible, but I’m also ready to confront it when needed, are you?

When I began my latest What Next, opening a Hand and Stone Massage and Facial Spa, I knew I was choosing a difficult path. If it was easy everyone would do it but I, and the many others before me, believed we could triumph over whatever complication got in our way. I’ve had my doubts at times, but I did what anyone else who succeeds does, I found solutions rather than complaining about the problem.

Obstacles, adversity, and disappointment are a part of life and yes we grow stronger when we overcome these setbacks. Sometimes we even seek out adversity because we know what lies on the other side. Do you look at adversity this way? Why or why not? Please share.


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