Important Lessons I Learned From Failing

The best advice comes from those who tried. While most of the how to get rich advice I dispense, comes from my Rich Habits Study and my various Rich Habits books, I also happen to be one of those who tried and failed. The most valuable lessons I learned, I learned from failing.

In my career, I started four companies. One of those start-ups failed. When the end came, I sat in my car at a park near my home one morning and cried like a baby. I had zero job prospects and no way to provide for my young family. That was the lowest point in my life. 

I eventually picked myself up and recovered. Not only that, thanks to the lessons I learned from failing, I now run three successful businesses.

Important lessons I learned from failing:

• Pick Your Partners Very Carefully – Success is much easier when you have great partners. Failure is inevitable when you have bad partners. Pick partners who have been there and done that – never go into any new venture unless your partners have real-world experience in that industry.
• Success Requires Risk and Sacrifice – You cannot succeed as an entrepreneur without taking risk and making sacrifices. The sacrifices you will have to make are many. The most significant will be time away from family.
• Trust Your Gut – By gut, I mean your subconscious mind. Your subconscious mind picks up things that are otherwise invisible to you. Always listen to that voice in your head. It is your gut telling you what to do or what not to do. That voice becomes loudest when your emotions are at their greatest.
• Success Takes Far Longer Than You Expect – Success takes a long time. Far longer than you expect. See Rule of Three below.
• The Pursuit of Success is Very Stressful – Things will go wrong. When they do, they create enormous stress. That stress affects you, your loved ones and your business partners.
• Fund Your Business With Your Own Money – When you are the source of your working capital, you are in control. When you depend on others for your working capital, they are in control. You will have to do what they tell you to do. You are their slave.
• Assumptions Have No Value – They Are Almost Always Wrong– Assumptions can cause you to look at things through rose-colored lenses. Most assumptions in a business plan are wrong. Always test every assumption before you accept it as fact.
• The Pursuit of Success is Exhilarating – There will be ups and downs as an entrepreneur. Far more downs than ups. But the ups make it all worthwhile.
• Success Requires Good Luck and Avoiding Bad Luck – In the pursuit of success, unexpected things happen. Sometimes they are good and sometimes they are bad. To some extent, success and failure are outside your control. Luck plays a critical role in success.
• Failure is Humbling – It Will Drag You to Your Knees – Failure is an emotional experience. It can take the financial legs out from underneath you and your family. It can destroy your family life.
• Success Requires That You Overcome Adversity – Obstacles, pitfalls, wrong assumptions, mistakes and the unexpected can stop you in your tracks. Sometimes you can overcome those hurdles and sometimes you cannot. Those who succeed are able to overcome adversity. Those who fail are not.
• Be in Control of Your Business – Control means owning more than 50% of your business. Those who have ownership control of your business, control your business, your future and your life.
• Pilot Every New Idea – Test new concepts first before diving in full-time into any venture. Dive in full-time only when the business model has been proven to work.
• Have Fallback Savings – In every start-up, things will go wrong. Make sure you have set aside funds to help you and your family survive if you fail.
• Understand the Rule of Three – Every new venture will take three times as long as you think, cost three times as much as you expect and revenue and profits will be one-third as much as you forecast.
• Business Plans are Bullshit – Business plans are not worth the paper they written on. Never go into any venture solely on the basis of a business plan.
• Have a Powerfully Strong Marriage – If you have a weak marriage, it, along with your start-up, will fail.
• Go Lean – Don’t hire anyone. Use subcontractors. Only hire employees when you are succeeding and the business model has been proven to work. Work out of a shack.
• Keep in Constant Contact with Your Network – Pursuing success demands a great deal of your time. It’s easy to lose contact with your friends and former colleagues. Don’t ignore your relationships. You will be calling them to help you find a job if the start-up fails.