I want to tell you three stories about decision-making that illustrate how the “obvious” route often leads to a dead end. These are three instances in which being stupid saved my ass and my bottom line. Then, at the end, I’ll try to leave you with a recipe for how you, too, can win at business by being stupid.
Prior to the real estate meltdown of 2008, I owned almost 100 residential properties. Things were going well, and my holdings were appreciating so fast that I was gaining upwards of 15% per year. Despite this, based on some analyses I did and some market indicators, I developed a sort of gut feeling that I wanted to sell most of my holdings and get into a strong cash position. There’s always somewhere else to go in business, and I felt an eerie intuition that the tide was going to turn against me.
Based on that intuition, I started liquidating. According to my friends and business partners, this was a terribly misguided thing to do. Real estate never goes down, they said. It hasn’t been down in 100 years, they said. Why on Earth would I sell?
The big win:
We know how this turned out. Call it dumb luck if you want, but shunning the clear, “right” choice saved me a ton of money. I didn’t take any happiness from having escaped relatively unscathed from a crisis that swallowed up many of my friends, colleagues, and countless people around the world, but I do think of it as a positive lesson to be heeded.
Remember those business partners from story number one and the fact that I escaped the housing crash “relatively” unscathed? Well, the fact that some of the properties were jointly owned meant that I wasn’t able to get out from under all of them as easily as I wanted. This left me with a few dozen empty homes that couldn’t be rented out for anywhere near the cost of their mortgages, since amateur investors were renting out homes for anything they could get just to save their credit.
One night as I sat reviewing the listing for one of these properties, I had a wild idea.
If I couldn’t rent the place for $1,600 a month, why not try renting it for $1,600 a week? I found some pictures of furnished homes that I thought I could replicate and, along with the real exterior photos, posted them that night as vacation rental ads. This time, nobody had to tell me — I knew it was stupid. But could it be just stupid enough to actually work?
The big win:
Literally that same night, the house I listed got its first week-long booking at $1,600. I went out and found the furniture and decor I needed, put it in the house, took more photos, rinsed, and repeated. Within a few months, I had furnished all the empty homes I owned or partnered on and was renting them out just like the first. It seemed almost overnight that I went from the precipice of bankruptcy to the largest vacation rental owner probably in all of Florida.
Fast forward to 2020, and I run a haircare and skincare manufacturing facility that has seen great growth for several years running. This year looked no different. And then, of course, came COVID-19. Suddenly all analyses were negative, all projections were down, and our entire company looked to be at risk. But then I thought, why not hand sanitizer? We were perfectly set up to sell it, demand was sky-high, and our competitors were making the same move. If we didn’t jump on the bandwagon, we could be left in the dust with no business at all.
I said no to hand sanitizer. By now I was wary of going with the crowd, but some of the people around me said it was stupid to pass up such low-hanging fruit. I was getting dozens of calls per day and some were million-dollar orders I was passing up. Maybe it really was stupid, but I’ll let you be the judge because here is …
The big win:
Two things ended up being much more worthwhile for our company than hand sanitizer ever would have been. The first was aloe vera gel, which turns out to be a complementary product to hand sanitizer, making demand for it shoot up as well. We were already manufacturing that and, without so much as a single changeover, started selling millions of dollars worth of a product we already made! The second was finding and signing clients who felt betrayed by other manufacturers, and here’s the kicker: Why did they feel betrayed? Because those manufacturers had committed their resources to the hand sanitizer bandwagon!
How to be stupidly successful
Operating this way isn’t very complicated. It requires baking two things into your business mindset combined with patience. The first thing is self-awareness. Yes, there are a lot of business decisions and processes that necessitate you listening to others and being willing to hear and heed their advice. But when it comes to the big stuff — the meaningful pivots — you have to be in the habit of slowing down and asking yourself why you’re headed in a certain direction. Don’t chase the money. Take the path that leads you to the life and business model you wanted before faced with that particular pivot. And then, you have to be willing to about-face and head in the other direction as needed.
The second thing you need is grit, or, to never give up. Never. There is a certain wisdom in being able to admit defeat, but it’s never useful to accept the state of being defeated. We all fail. Sometimes stupidity is why we fail, and other times, like in the examples above, being stupid is how we pick ourselves up again. When a fighter gets knocked down and his corner wants to throw in the towel but he refuses, some people will call it stupid. Other people will call it a winning mindset. As they say, it’s not how many times you fall that matters, it’s how many times you get back up. And that is really up to you.