Show notes from Sweaty Startup podcast episode 43.
- Your ego begins to cloud your judgement
Ego is a touchy balancing act. Early on the ego is what leads to success. It’s what suppresses the fear of failure and the anxiety that goes along with a new business. It’s what allows someone to be comfortable doing something that only .01% of people do successfully.
Nothing is clear cut in entrepreneurship. There is no best practice guaranteed to produce results. Its fluid and it changes often. Every situation is different and the decision that turned out to be great a few weeks ago could no longer work.
Changing your mind quickly is a key attribute of a successful entrepreneur. You are never pot committed. You are always ready to accept defeat and change the plan. The ego challenges this. The ego clouds your sense of perception and can drive you deep into a dark dark place and bring everything crashing down.
Instead of looking at the markets with a humble open mind you now have on a pair of rose colored glasses. You get overconfident. You think it’s easy. You trust your gut a lot more than you should.
Being “right” when arguing with someone who disagrees with you becomes more important than uncovering truth and facts with logic.
- You forget that luck plays a big part in business.
You win some and you lose some. Being at the right place at the right time is a lot more important than being an exceptional person. Some of the wealthiest entrepreneurs of all time are just your average people who worked smart and caught some big breaks and had the brains to recognize opportunities. Skill can’t always save a failing business. If the market doesn’t want what you are offering its time to cut your losses and move on.
- Unrealistic timelines
After early success its easy to forget that it took a long time to build what worked for you the first time. You forget that its a long process and the dip is real. Business isn’t always fun and pushing through the slow unexcited time is not easy.
So you set unrealistic timelines and get discouraged when things take time to develop.
- A big failure can ruin a lot of small successes
After early success you get comfortable with risk. Instead of starting local and small you decide to start national and big. So you double down on the next venture to make it all happen even faster and make even more money. What could go wrong?
- You surround yourself with “yes” men
It’s natural for people to seek information that supports their opinion. Thats why the democrats watch CNN and the republicans watch Fox. Business is no different. After an early success its often easy to get caught up hiring a bunch of “yes” people into your inner circle.
Along those same lines people are less likely to challenge you when you have a track record of success. You are less likely to ask for help or advice as well. You start talking more and listening a whole lot less.
- You don’t take the time to learn the service the second time through
Your first business you started at the bottom and learned the service. You learned what your customers wanted. You learned the methods that worked best. You adjusted and refined everything.
The second time through you think you have it all figured out and you can hire employees right off the bat. You already know what the customers want. You already know the most efficient way to do something. No need to spend time actually learning it right?
- Lifestyle creep
A few years in a row earning a few hundred thousand dollars a year can lead to some bad habits. You lose your scrappy frugal attitude and you start to indulge a bit in the finer things. You buy a nice car. You buy a big house. You start frequenting the best restaurants and maybe even join the expensive golf club in town.
The lean lifestyle that led to a healthy and adjustable business is now gone. You need to be earning $15k a month just to pay your bills. If things get hard you are stuck with all that overhead and it can all be gone in a heartbeat.
- More distractions arise in the form of “opportunities”
You got to where you are today by saying yes to basically everything. Any opportunity that came a knocking you jumped on it full speed ahead.
After some success opportunities start to come at you out of nowhere. More people reach out to you with ideas. With a little money you are suddenly in the market for several different businesses or assets that may be for sale. You are suddenly committed to several meetings a week. You are being pulled in thousands of directions. Your life becomes hectic and stressful.
It’s easy to forget that time is your most valuable asset and the only thing you’ll never get back.
- Money becomes the driving factor and the measuring stick
Great entrepreneurs recognize value and understand how to measure it, grow it and eventually exchange it for money. Thinking about things in terms of value and not money is a great way to stay grounded and keep working towards long term goals. When money arrives its incredibly hard to maintain this mindset.
- Moochers appear
All of the sudden you are expected to get the tab when you go out for drinks with friends. Then people start calling you to borrow money. Then before you know it you have 11 netflix accounts being charged to your credit card. You definitely find out who your true friends are.
- You forget how much suffering is out there
It’s easy to forget how bad a lot of people in this world have it. The poorest of the poor in America have it 10x better than the middle class in most 3rd world countries. Being able to feed your family is far from a stress on your list but thats not the case for a lot of people. It’s easy to get blinded into thinking anyone can succeed in this world and write off those in tough positions as lazy or unworthy people.
- What am I here for again?
After a big success and an emotional victory it becomes harder and harder to quench the desire for that next big high. You’ve made the money and accomplished your goals. What now? What is my purpose now?
You see rock stars and famous people struggle with depression and addiction. It’s no different for entrepreneurs coming down from that first big success.
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