5 ways how NOT to lose millions, like me.
Over the years, I’ve lost millions.
Be it losing actual money on failed investments or leaving money on the table because of missed opportunities. Other times those pesky millions slipped right through my fingers like water, leaving only a few drops.
First of all, let’s be clear. You can make a lot of money and still be losing a lot more. So even if you’re doing good, you might be missing out on great. This is to say that I’m not complaining about where I am right now but acknowledging that I could be far better.
I started my first company when I was 20, and now, two years shy of my 40th birthday I founded a few more, sold two, lost one, and ran out of two. With a few more bruises and a little bit wiser these are some of the things I wished I knew sooner or paid more attention to along the way.
1. Don’t overextend yourself.
If you want to lose a lot of money, there’s nothing like taking on every project that comes your way. Multitasking is just a fancy word for staying busy and accomplishing nothing.
Successful people stay focused on what's important. They run on methodologies like OKRs and 4xD. What do these have in common?
They tell you to prioritize your objectives and get things done.
The one thing I wished I've done sooner was to visualize my goals. Simple but effective. I now approach this Kaban style by creating a board with a backlog of projects with one important rule: only three things can be “In Progress” at a time. If I want to do a fourth thing, I have to either finish or kill something to make room. Doing this takes a lot of discipline.
This one accounts for losing me the most money.
2. Recruit, teach, and delegate.
Finding good people to work with is essential. Not having a team you can trust will keep you running and double-checking on both the important and the menial. Think of it this way: you don’t want your money-making machine to stop when you get the flue.
When recruiting, find people for their brains and bring them in for their hearts. Build a little process. You can think of a small written test and a challenge. In my line of work, we care about programmers who can think logically so we use hackerrank.com, and for other roles, we take little IQ tests. If your work needs people with a specific soft skill find a way to test that. Then, recruit someone who believes in what you are doing and gets excited about your ideas.
Not delegating [work] is like watching a waiter with five platters full of dishes fall in slow motion.
Delegating is hard. I can't put it any other way. Its a balance between letting go and keeping an eye on things. But not delegating is like watching a waiter with five platters full of dishes fall in slow motion. It can get brutal and will definitely get you on the path to lose millions.
3. Think ahead but don’t go on autopilot.
“Plans are nothing; planning is everything” is a phrase commonly attributed to former President Eisenhower, although the actual quote is, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” In this quote, he differentiates the word plan and planning, rightfully so.
Plans are documents containing precise ways to do something while planning is thinking beforehand about the objectives you’re trying to reach and defining the methods for achieving them. Planning is more of a living process, whereas plans are documents, perhaps a by-product of planning. Planning leaves a little room for a rainy day.
I wasn’t so bad at this one, but it took me some time to make a habit out of it. Sometimes I would start a project with planning, but most of the time, my impulses got the best of me, and I jumped the gun. Even though I’m still a gutsy person, I would recommend planning, even if just a little, before every project.
Extra Tip: A good practice I’ve learned over the years is to plan for an exit: what if your partnership/project/idea turns south? How do you get out? If you have partners, who gets what, and who pays for what? I know it’s morbid, like writing your own will, but it will save you a lot of grief later on.
A lack of planning not only lost me money but a few good friends.
4. Profit comes first.
When planning out your new project, remember to put profit first. The conventional formula to a business case is income minus expenses equals profit. Forget this. Declare your profit first, then your expected income, and then play with your expenses to achieve the profit you want.
Don’t compromise on your profit; otherwise, you’ll find yourself working for your payroll or your providers.
Oh, and pay no attention to the hipster millennial startup economy of burning cash until you make it. It was fun while it lasted, but nobody (especially after COVID) wants to keep playing that game. Take it from the WeWork guys, its not a smart way to approach things. This guy knows what I'm talking about.
This one will lose you a few million over time, like a dripping sink.
5. Keep your cards close to your chest.
Don’t go telling everyone that you’ve got a new startup. Don’t tell your coworkers you’re fighting for a new promotion. Don’t spill your tactics to your neighbors. Don’t show your cards. At least not all of them.
This one needs little explanation. I would sometimes confide with someone because let's face it, ideas get perfected when you tell them. It’s not even the feedback that’s important, but just hearing your thoughts out loud helps a lot. Find one or two trusted allies to talk to. It helps if you have a mentor/coach, but even in those cases, don’t spill all the beans.
If you master this one, you’ll find yourself doing more and talking less. This will avoid you leaving some millions on the table.
