Minimize Your Risks
I once worked with some individuals who operated a very successful insurance practice. They had a great business financially, but they were utterly uninspired by what they were doing. They were not moving toward their beacon in the fog in any part of their life, and they were frustrated—not to mention running on fumes. At the same time, they had a great idea for a very progressive technology. That was where their true passion was. They knew they had something good and had even started filing the patent for their idea.
The problem was that every time they started down the path and began to make some progress, they would shift into panic mode. I could actually see the anxiety and pressure build up in their faces and their eyes. As I did some digging to understand what was holding them back, I finally was able to find out what was going on. They were worried their business model might not work. They would get partway down the path and then just freeze. They were afraid of failure. They knew so many entrepreneurs who had done the equivalent of running to Vegas and putting everything on black—and most of the time they had failed. Then they would head home broke and deal with lives that had been ruined.
When I finally understood what was holding them back, I said, “Listen, you don’t have to bet the farm. You don’t have to give away your soul. You don’t have to risk everything you value and believe in to succeed as an entrepreneur. There is a better way. It’s okay to use your insurance business as a base and then zig zag to success.” I then outlined the steps they should take. It was as if someone had pulled a huge, sopping wet blanket off of them. They got so excited. The fear left their eyes and their faces lit up. And soon they were zig zagging toward their beacon in the fog.
The Need for Pacing
From my own experiences, I have found that when people set their beacon in the fog and then head directly toward it without zig zagging, one of three things will occur:
- They never do it. There are lots of people who talk and talk about their dream and what they are going to do; but then, before they’ve taken their first step, their knees shake and wobble, and they don’t dare take the risk needed to progress toward their goal. I used to think these people were just weak-hearted, but I’ve decided that subconsciously they realize there is a chance they may fail so they do not even start.
- The second group of people race toward their goal full speed ahead, and when they get halfway there, they run out of resources and fail.
- The third group runs straight toward their goal, but by the time they get there, the target has completely moved and their great idea is now a lost opportunity. In many cases, if they had taken their blinders off and looked from side to side occasionally, they would have seen the need to adjust their course.
Zig zagging deliberately toward your goal makes the going slower. It is more methodical and might seem harder, especially for those of us who lack patience. But there is a much higher chance of success because zig zagging allows you to inch toward your goal and then adjust and adapt until you actually get to viability.
One of the benefits of this approach is that it puts you in a mindset of abundance by setting parameters for what you can and can’t risk or lose. And when that happens, you find yourself free from the fear of scarcity, which tends to paralyze us rather than motivate us. An example of this approach is found in the success story of the Marriott Corporation. In the 1920s, J. Willard Marriott opened a nine-stool A&W Root Beer stand in Washington D.C. As time went on he realized that people bought lots of root beer in the hot summer months but not so much during winter. So he started selling soup as well and changed the name to The Hot Shoppe. In the early days, he and his partners worked lots of long hours to get their shop to profitability. As they looked for additional opportunities, they obtained the food service management contract with the U.S. Department of Treasury. Then during World War II, The Hot Shoppe catered to the many defense people who moved to the nation’s capital.
It wasn’t until 1957 that Bill Marriott opened his first hotel. As the business grew, he found parallel opportunities as his company grew into one of the largest hotel chains in the world. Some of those ventures included expanding the food business to service major airlines and buying additional restaurants like Bob’s Big Boy. With each new project, Bill was able to get enough cash to move on to his bigger goals. (www.marriott.com/careers/history) This is a great example of a company starting small and zig zagging its way up to long-term strength and success.
Many first businesses revolve around services. The reason being is that service businesses can usually get you to cash quickly. The downside is that they are often labor intensive in the beginning. At the early stage, you are literally the butcher, the baker, and the candlestick maker all rolled into one because you typically don’t have any (or many) employees, and so you have to carry the brunt of the work.
For example, when we started CastleWave, Ron and I had to be the salespeople to land our first account in New York. I then had to be the programmer and had to personally optimize the website. We also had to be the secretary and bookkeeper and take care of billing and collecting the money. This was very time-consuming work, but it did bring in the first bursts of cash that allowed CastleWave to get off the ground.