Everyone always talks about winning. But not enough is talked about mistakes in entrepreneurship.
Not one successful individual I know was ever immune to failure or mistakes that could have been avoided.
So it’s natural when you’re less experienced, you make mistakes that are possibly easy to avoid.
I often look back and make a list of the ones I was guilty of:
- Overspending
- No viable process
- No clear exit plan
- Wanting too much
Overspending
The most obvious one. I was a star in freelancing and was doing great in poker, and day trading and just launched a SaaS. (that was 15 years ago)
But the over-enthusiasm got the best of me, once I left the freelance scene and had extra time on my hands. That led to spending and overspending in areas to fill a void.
I am talking about high-end clothes, luxury items and the need to go to restaurants that were 5X the price of a usual meal.
Before I knew it, my liquidity ran drier than the Sahara Desert and I started to panic.
Not that I went broke, but seeing my cash reserves dwindle and taking a few hits in trading, unexpected costs and development of the SaaS project made me realize I need to change gears.
The problem was NOT the spending alone on items I wanted to have. But the type of people you attract with it.
You acquire a different network and they slowly suck you into high-end events or dinners that you are not going to refuse and feel bad afterward by showing up.
I drew the line and started reading about minimalism and habits. I made a 180 in my spending, and how I was living.
- No more clothes with logos as big as a billboard
- No more purchasing decisions based on a trend or what others were doing
- No events or group dinners with people I don’t even want to be around
I talked to one of my clients. She is to date the richest individual I know. (net worth around 1.3 billion)
She told me:
- Eliminate all the noise for the first 10 years
- If you buy luxury clothes, buy the ones that have no logo or minimal visibility
- You live more balanced and happier
And she was and is still right.
Even though I am currently very comfortable and my wife and I do buy items or clothes that are out of reach for many, I am still wearing $5 dollar t-shirts every day because I work from home.
My closet still looks as boring as 15 years ago. 20 of the same shirts, same pants, same everything.
I find it now extremely hard to go back being all flash and cash. It gives me insane fake guru vibes. Even when we can afford it, we are not attracted to this lifestyle.
I am very glad I listened to her. I did eliminate most of the noise for a decade and that sets us ahead on earlier retirement.
PS: My wife is 36 and she already retired because of our approach.
No Viable Process
When you’re young you think about earnings and projects but rarely about implementing viable processes that are scalable or puts you in limbos day in day out.
In the beginning, my processes were non existent and that was reflected in:
- Working vs earnings ratio
- Unable to scale
- Organizational efforts
Especially the last one.
Entrepreneurship requires building great habits, bake in a daily routine and stay on point with the smallest stuff even when it seems meaningless.
When you start to ignore the organizational side/admin tasks this can snowball into a giant mess.
Some processes can be as simple as:
- Check emails on mornings and evenings
- Routine checks on content
- Clean up old files and backups
For example, in my free niche blog guide, I mapped out a process for how I document my SEO and blogging efforts.
Not only gives this an overview, but a forced polished routine that is doable within the time I have.
Establishing the correct processes from day 1 will prevent you from problems in the future.
Don’t make that mistake. I spent too much time “problem solving” than doing actual work.
No Clear Exit Plan
This applies for many scenarios, and if you’re like me then you know as solo entrepreneurs can be liabilities.
Imagine you’re running a business and everyone depends on you. You get sick, hit by a bus and your business comes to a standstill.
The faster you can take care of this single point of failure, the easier you can operate.
This could be:
- Having someone to assist you and take care of critical things
- Finding a co-founder in case it makes sense
- Start hedging your bets with more “passive income”.
Especially the last one. There was a time I was focused on service based business alone and my fate hinged on me being healthy and my clients that might or might not dump me the next day.
Here’s a prime example:
I mapped out my reasons why I started The Super Hustle.
And I state clearly I am planning to leave the service based area (coaching, consulting, mentorship) in 4-5 years from now.
In order to do that, I have a target to expand this website and add valuable content that can be monetized, premium courses that require little updates and move into a more passive state.
But even if we go back, some people asked me before:
Why are you still coaching or mentoring for such a low cost?
Because if you make more than 1M+ per year in net earnings, do you need it?
Which I often reply with:
Because, I am active in areas where volatility, risk, and variance can make or break your case and nobody is immune to a bad streak.
So consulting is always a method for me to hedge my bets and predict my income more on a monthly basis. I consider it as a safeguard.
I was not thinking like this when I started and there was a time I had all the money in the world one month, and no revenue the next one.
When that happened (three times btw), I needed to put a full stop on it and start considering:
- Exit strategy
- Diversification in income
- Create an insurance AND assurance in worst case scenarios
One of those real examples was when indie entrepreneurs were selling a SaaS model that relied on the Twitter API… until they charged tons of money to use it.
Dozens of small startups went out of business because of it and they had no backup plan.
Always think forward —- Always consider an exit.
Wanting Too Much
A rookie mistake that I am guilty of in my earlier days.
I wanted too much at the same time. Dipping my fingers into multiple projects where… nothing was ever really finished nor made any money.
I was comparing others with my own trajectory and that’s a bad idea.
There’s nothing wrong with wanting everything, but consider a time and place for when, what and where.
Map out a blueprint that works according to your situation. Think about the consequences and overload of work.
If you have not proven yourself to build ONE viable business, what makes you so sure you can do multiple at once?
Instead, focus on one, and once you have your processes in place and some predictability you can expand your horizons.
It’s how I went from one business to 11 different income streams and got to 1M+ per year.
Final Note
I totally get that you want to conquer the world and are ready to jump into entrepreneurship, but more often than not I need to tell people to take a breather and go full-stop on their approach.
But you might end up with less than you started.
Calculate your risk appetite and always, always think about worse case scenarios because those are the ones that will define you as an entrepreneur.
Be frugal in your first decade and compound your cash. Staying liquid is critical and enjoy the money afterwards.
Great entrepreneurs build business, the best entrepreneurs are resilient enough to sustain storms and think ahead at all times.