Everyone defines business success differently, although universally, it includes profits.
When I ask people who are successful in business profits what is the one thing that they owe to their success, most say it comes down to this: try a lot of things, fail at most, but through all those failures, you find a few that succeed.
For me, I have also found this to be the case.
Here is how I have put this into action in my life.
Develop the mindset that I will fail at most things I try, but don’t let it get me down; just keep plowing forward.
I have found that this mindset has helped me out a lot.
Not because I need this mindset to justify my failures or to serve as a convenient scapegoat if I fail.
But this mindset allows me to try more things than if I did not have this mindset. It helps me to not fear failure.
Make sure those failures are small and manageable, which means to not take on such huge risks that the failure would create significant calamity in my life, both professionally and personally.
This is one area I have had to learn the hard way.
When I was younger, I use to bet the farm and sometimes I won big, but I also lost big.
A large part of this is my personality and how I am wired: when I commit to something, it’s “ALL OR NOTHING”; hence the tag line for my website.
That can be good from a perseverance or staying power perspective, but also bad from a risk management standpoint.
As I have grown older, I have learned to break up risks into smaller and more manageable chunks.
The proverbial “test before you invest”, which is a huge element of my Growth Stack approach to growing consumer product companies, allows me to keep risk low. I still go all in, but just in smaller steps rather than in one big leap.
But sometimes going slow in small steps can increase your costs in the long run, so maybe taking a larger step makes more sense. For example, if I want to test working with a new contractor or support provider, and am offered a month-to-month payment option, it might be best just to negotiate a 6-month contract with some reduction from the month-to-month, since doing anything less might not be enough time anyway to test out the relationship.
Make sure I set myself up to learn from those failures so that I stand a good chance of engineering out the circumstances around those failures for future endeavors.
This is really important; anytime something does not work, I analyze why, summarize lessons or rules and document them so that I am hopefully less likely to make that mistake in the future.
Same goes for successes. What worked, why and how do I build in a process to do that again?
To me, documenting learnings is huge, which I do extensively in my knowledgebase for growing consumer product companies.
I even created a specific section in my knowledgebase to document the pitfalls – the things that tripped me up in the past. I also maintain a personal journal with a lot of free form thoughts where this stuff goes.
Build in the capabilities that let me try a lot of things and fail at them quickly so I can learn towards my successes.
The more I try, the more I learn, so its best to be able to do this quickly, which means I need to build in the capabilities to let me do that.
The best example is how I have engineered my marketing technology infrastructure for my businesses: I built it to be able to quickly try marketing campaigns, collect the data, analyze, make corrections, then try again, all at a fast pace.
If, for example, I had to engage with a developer to adjust or develop a new landing page for every marketing campaign, that would dramatically slow down this process (and increase costs), which is why I built my system so I can run it all myself.
Setup my systems and processes to keep me on track.
I have found that when I setup systems and processes for nearly everything in my life, I am more successful and less prone to getting emotionally carried away, which is bad for decision-making.
Systems and processes keep me on track, focused and more objective.
Identify at least 3 other areas where you can leverage the risk if it fails.
For example, a risk is introducing a new product. The goal is to increase profits.
But if that fails, what can I still get out of it?
- More learnings, obviously, but only if those learnings can be applied in the future. If I introduce a food consumer product, which is one of my key categories where I like to play and it fails, I know I will learn for future food product launches. But if I build a B2B SAAS product, which is a category I do not work in and do not know and it fails, and I never intend to do anything there again, then those learnings may not be giving me much to leverage into the future.
- If a food product, then maybe I can take the formula into a different direction with some minor tweaking and introduce it as a new product in a new category.
- Maybe the food product does not succeed as a lead horse to drive my growth but can succeed as a follow-on or upsell product to another lead horse product.
- Maybe the food product does not succeed anywhere but is inexpensive for me to make and stock so I can sell it at cost or even give it away to really good customers.
- Maybe there are some key business relationships I will build with others to be leveraged elsewhere through this food product.
Analyzing from this perspective helps position me to still win even if this particular risk fails.
How I have put these elements into action
I have phrased the elements above into the following questions that I use to help me make decisions that involve risk:
- Do you have the right mindset?
- Is this a small risk? If not, can you break it down into a series of smaller risks?
- What is the risk(s) with this decision? Be specific and quantify.
- Can you review the outcomes (successes and failures) and capture good data to obtain the learnings?
- Do you have the capabilities to attempt this risk quickly? If not, how can you increase the speed of it so it does not drag itself out and bog you down?
- Do you have the right systems and process in place help you make a decision that keeps emotion out of it? See more here about keeping emotion in check when making decisions.
- Can you identify at least 3 other areas to potentially leverage into if the risk fails?