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5 Reasons Heartbreak Is Good for Entrepreneurs

Like business failures, however, there is a great deal to be learned from them. Here are five reasons to get over the fear of both.

Peter Gasca

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Tis better to have loved and lost than to never have loved at all.

Those are the words of Alfred Lord Tennyson, who first penned the phrase in the mid 1800s. While he may not have intended them to apply to business, experienced entrepreneurs know that there is a great deal of validation in his words.

Related: 4 Ways for Entrepreneurs to Inspire Confidence Even When Talking About Failure

That’s because while starting a business is challenging and frustrating in itself, more so is the pain and heartbreak when you realise it is time to close and let it go. Much like a first love, your first business is something you will pour yourself into, heart and soul, so the idea of it coming to an end is enough to break anyone emotionally.

Heartbreak, however, either in love or in business, can be a good thing.

If you are an entrepreneur who is facing the agonising realisation that your business is failing, or you are holding back from starting a business for fear of failure, then here are a few reasons you should face the potential heartbreak with more confidence.

1. You will survive

Most would-be entrepreneurs are terrified of failure, envisioning a failed business as an albatross they carry for life. The truth is, regardless of how grand your business may fail, debts can be negotiated, employees will find new jobs and broken business relationships can be healed with honest transparency.

Remember, if you don’t let it kill you, heartbreak will make you a better person.

2. You will be better prepared

Like love, time heals the emotional wounds of a business failure. As you rebound, you will be emboldened with new insights, knowledge and experience. You will know better what it is you seek, what is important to you, and more important, what you should avoid the next time you try.

Take on every heartbreak and failure as just another life lesson that prepares you for the next.

Related: The Million Rand Question That Can Resolve Your Company Woes

3. You will rebound faster

You will almost certainly have more than one heartbreak in your life, so too will you have more than one business failure. Like heartbreak, experience is what helps entrepreneurs rebound from and persevere through each subsequent failure, and each time the recovery gets easier and faster.

Finding new passion and enthusiasm gets easier when you better understand just how resilient you are.

4. You will be more valuable

Experience trumps inexperience. Yes, there are benefits to working with someone who has not yet been tainted by institutional standards and paradigms, but my experience has demonstrated that the most valuable partners are those with whom I can relate. For instance, I find I have a deep connection with someone who has also been stricken with panic at the agonising reality that you must close an office and terminate 20 employees.

Only experience teaches you how to cope with that.

5. You will appreciate more

Like your first love, your first business will be difficult to enjoy. Fraught with uncertainty and insecurity, your perseverance will be fueled by infatuation and optimism instead of fact and reality. It is not until you have the experience to be more selective about what you want (and don’t want) that you will ultimately be able to appreciate the business for what it is.

So if you are holding back from pursuing your entrepreneurial ambitions, then my advice is to fear not the potential (and inevitable) heartbreak of failure, and instead approach it as an inevitable reality that will make you a better entrepreneur in the long run.

Venture on.

Related: Silent Killers of Great Businesses and How to Avoid Them

This article was originally posted here on Entrepreneur.com.

Peter Gasca is an entrepreneur, small-business consultant, author and business adjunct lecturer. He is the co-founder and CEO of Wild Creations, a specialty toy and game developer and manufacturer. Previously, Gasca had a successful career as a business-development consultant for USAID and a long career in real estate development. He is the co-author of One Million Frogs.

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Business Survival

6 Common Decision-Making Blunders That Could Kill Your Business

Among the logical errors nearly everybody makes is thinking only everybody else makes logical errors.

John Rampton

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Humans are often very irrational. If you’ve ever explored behavioural economics or psychology, you may have found a host of examples demonstrating situations when we make objectively bad decisions.

Below are six of the largest decision-making blunders we all make. Avoiding them will dramatically improve your decision-making, your quality of life and success.

1. Sunk-cost fallacy

Of all the ones on this list, the sunk-cost fallacy is the most common. Many of the decisions we make are final or difficult to change. For example, let’s say you invest R1 000 in Facebook, and the price of the stock goes down to R600 the following day. The fact that you put in R1 000 initially is irrelevant to the situation at hand; you now have R600 worth of Facebook shares.

What this means is that once the decision is made and our cost is incurred, there’s no point thinking back. You already put in the time, money or other form of investment. Considering that in any future decision is illogical, despite how tempting it is. Instead, present yourself with the new options at hand — without considering the sunk cost.

Related: The 3 Dumbest Business Mistakes New Entrepreneurs Make Most Often

2. Narrow framing

Would you take this bet? You pay me R1 000 if a flipped coin lands on heads and I pay you R1 200 if it lands on tails. Most people would say no. We tend to be risk-averse, unwilling to risk something like R1 000, despite the reward being a bit greater.

Now, what if I offered you that bet, but I promised we would flip 100 coins? Each time, the loser pays up. Would you take it then?

Almost certainly, right? The chances that you lose money, overall, are extremely slim. This idea can be applied throughout life. When we’re in situations that will repeat themselves over time, we should take a step back and play a game of averages.

3. Confirmation bias

Another common one in the worlds of psychological and behavioural economy is confirmation bias. It hurts our ability to keep an open mind and shift our opinion. When we have a held belief, we typically look for information that confirms our opinion while ignoring data points that tell the opposite story.

For example, if I’m really excited about a new software product that I just integrated into my business, with ten of my employees as users, I might have made up my mind about the quality of the service before we put it to use. I would then be more likely to listen to the three employees who enjoy it, not the seven who don’t.

There’s almost always information that will validate our opinions, no matter how wrong they might be. That means we need to always look for conflicting evidence and, from there, make judgements based on more well-rounded information.

Related: 6 Rookie Investor Mistakes You Must Avoid For Profitable Investing

4. Emotionally driven decisions

When we’re angry or upset, we’re much worse decision-makers. When you have to make an important decision and happen to be in a bad mood, you should hold off. Instead, wait until you cool down and can think more clearly. It will remove the outside influences and let you think more rationally.

5. Ego depletion

This one makes intuitive sense, but it’s one of the most common ways to make bad decisions. The idea of ego depletion is that when we’re drained, physically or mentally, we’re less likely to think critically. Think about the times you’ve been exhausted after a long day of work. In those moments, you don’t want to have to think hard about anything. Instead, you want your brain to work automatically.

What that means is that when you’re tired and faced with challenging choices, you’ll rely more on your instinct or automatic processes as opposed to analysis and thought. That can be extremely problematic in situations that require effort.

6. Halo effect

The halo effect says that once we like somebody, we’re more likely to look for his or her positive characteristics and avoid the negative ones. This is similar to confirmation bias, but it’s oriented around people.

Related: 10 Stupid Mistakes Smart People Make

For example, let’s say I just hired someone named John, who was great during his interviews. Through his first few weeks, John does a few things well at work, but he also does many things poorly. The halo effect — brought on by his wonderful interview persona — could cause me to ignore his poor attributes and emphasise his good traits.

This can be detrimental to our ability to make judgements about others. We have to realise our biases toward certain people and eliminate them.

These are a handful of the many decision-making errors we’re all prone to. Although it’s challenging to scrutinise your preconceived notions, doing so is worthwhile. It gets easier over time and will, ultimately, make you a more effective decision-maker — personally and as a business owner.

This article was originally posted here on Entrepreneur.com.

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Business Survival

8 Reasons Why Failure And Focus Are Essential To Business Success

There are two Fs that define the long-term and sustainable success of your business – Failure and Focus.

Nicholas Bell

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There is an event that runs globally across countries such as the United States, Spain, France, Brazil and Israel. It is a conference that is aimed at the entrepreneur, the investor, the developer and the designer. It also caters exclusively for failure – FailCon asks the entrepreneur, specifically within the technology space, to embrace failure. However, this focus on failure isn’t about leaping blindly into the ball pit of collapsed dreams and wallowing in its sorrow as you shout ‘Bazinga!’. It’s about being comfortable with the idea that failure can happen and using it to drive your business focus and long-term success. These eight steps define exactly how…

1. Not big, iterative

Giving someone advice to fail big isn’t practical. It isn’t the kind of attitude that investors will be drawn to either. Instead, embracing failure is about being open to the fact that it may very well happen to you and some of your ideas. It isn’t necessarily going to be a gigantic failure on a scale of company-wide collapse. It could just be that you had an idea, and it wasn’t a very good idea so it failed.

Related: Beauty Of Failure: The Art Of Embracing Rejection

2. Focus on your agenda

If you’re not focused on your end game and business agenda, don’t expect your staff to be. This level of focus is critical as it gives people direction. They then understand exactly where the business is going, what it hopes to achieve, and the role that they play in taking it there.

If you don’t have this level of focus, your staff don’t have anything to latch onto.

3. Learn

learningThis is where your ability to fail is of value. You need to test your assumptions and ideas and then use their failures to learn more about how they could potentially succeed in the future. You have to learn from your mistakes. Don’t drown in self-doubt, take the mistakes and move them towards enhancing your business.

4. Success isn’t easy

Look, if being a hugely successful entrepreneur was easy, everybody would do it. You need to keep the focus and intensity you brought on your first day all the way through to today. Create short term goals and objectives that give you endless purpose and a sense of achievement and use their success to drive you onwards towards your final destination.

Related: Flourishing Through Failure And Finding Fortune

5. Build in plenty of goalposts

Justify every decision and long-term goal through relentless measurement to ensure they are the right decisions. The last thing you want is to hit your goal in 10 years and discover that it wasn’t the right one, your business hasn’t gone anywhere and you’ve worked incredibly hard for nothing. The effectiveness of your time, decision making and execution is critical.

6. Define failure

What does failure mean to you? Understand how you define it and then use this as a barometer to define your idea of success. As long as you have clear objectives for both, you can assess your business, its effectiveness and your results. As mentioned in above, always set goals and objectives so you give your company and people a sense of purpose.

7. Your ideas aren’t always that good

Some of your ideas are not going to fly. They’re going to collapse with an embarrassed sigh. The lesson is that you should be constantly questioning yourself so when you are in a situation where your ideas don’t work, you can objectively examine why they failed and use these learnings to change and adapt.

There needs to be a healthy tension between learning through theory and practice. The latter is learning to win and to handle defeat in real time with real results.

Related: Your Business Failure is Your Fault

8. Get over it

It’s quite easy to wallow in your failure misery and lose years to personalised anguish. It’s harder to just get over it and move on. The thing is, it’s moving on that counts. Those who get up, dust themselves off and start again are those who end up thriving. The ability to compartmentalise and learn is invaluable as you take your business from your first idea through to a sustainable, epic enterprise.

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Business Survival

How To Embrace An Exponential Mindset For Your Business

In the age of exponential technologies, it’s a risk not to take a risk.

Mic Mann

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Think global and exponential

If you’re an entrepreneur trying to establish a successful business, it’ll be dead before it even takes off, if you don’t build it for the future. You have to think three to five years ahead, so when it launches, it’s still relevant.

Think like former Canadian pro ice hockey player Wayne Gretzky, who said: “I skate to where the puck is going to be, not where it has been.” And these days it’s easier for entrepreneurs to predict the future thanks to technology and data insights.

Consider what Singularity University co-founder Ray Kurzweil calls The Law of Accelerating Returns. He says the only thing that’s constant is change and that change itself is accelerating exponentially. As per Moore’s Law, information-enabled industries are doubling their performance and halving their price every 18 months, according to the price-performance ratio. The field of biotechnology has managed to surpass that.

Related: 5 Mindset Changes You Must Make When Going From Employee To Entrepreneur

There’s no time to slow down, your business has to constantly evolve, and you have to keep asking “what’s next”. Encourage experimentation and innovation in your company. Innovation focuses on incrementally improving your already existing products and services, while experimentation allows for fresh outlooks and breakthrough strategies that leapfrog old ways.

We should reprogramme our linear mindset into an exponential one. Don’t aim to grow your business by 10 per cent year-on-year, but rather 10 times. The first thing I learned at Singularity University is the potential of exponential growth. If you take 30 linear steps, you only move 30 places, but if you move 30 exponential steps your place doubles with each step and by the 30th step, you’ve moved over a billion places.

We’ve seen this happen with unicorns – not the magical creatures, but start-up companies that are valued at over $1 billion within their first year – like Slack (cloud-based team collaboration tools and services) and Square Inc. (a mobile payment company). It once took around 20 years for American companies to reach the billion-dollar valuation mark, now it may take less than a year.

In the early stages – until your third step – your progress may seem linear. Many exponentially-geared companies give up at this point – just as their growth rate is about to explode. Persevere!

A few decades ago it was unthinkable for an individual or start-up to disrupt entire industries. Start thinking globally, not locally. Use staff-on-demand and crowd souring to propel your business ahead of the competition. It’s unlikely that you have the world’s smartest minds working for you, however with the power of the crowd, you just might.

If you’re struggling to find a solution, turn the challenge into a game and offer prize money. You’ll have thousands of people attempting to solve your problem, but will only pay for the best solution. Kaggle is a platform for predictive modelling and analytics competitions. It lets statisticians and data miners compete to produce the best models for predicting and describing data. Mining company Gold Corp placed its geological data online and offered money to anyone who could locate gold at their Canadian mine. Four of the five winning entries struck gold. And in 2011 it took a team of gamers 10 days to solve an enzyme riddle that could hold the key to curing AIDS.

The six Ds of tech

As companies become information-enabled they should internalise what Singularity University co-founder Peter Diamandis calls the six-step growth cycle of digital technologies. These Six Ds of Tech Disruption are digitisation, deception, disruption, demonetisation, dematerialisation, and democratisation.

The first step is digitisation. Once something enters the digital realm it gains the potential for exponential growth. Think of the radio and CDs. You no longer need either, instead you can stream online, listen via YouTube or download music. After digitisation, growth appears slow, even deceptive. Sadly that’s when many companies opt out. Be patient!

Related: How To Build The Right Mindset For Start-up Success

No one imagined Kodak would disappear after a century. Kodak thought they were in the business of printing photographs, while they were in the business of memories. Think about the need your business solves. Kodak invented the digital camera, but was too scared to disrupt its own industry. It didn’t realise that people were no longer taking photographs in the same way, so their competitors disrupted the industry instead.

Today, the camera has become part of the smartphone and photographs are predominantly shared via social media. Instagram epitomises the next step in the equation: demonetisation. With time technology becomes cheaper and even free. Instead of printing photographs, many people instantly share them on a free smartphone app like Instagram.

Next comes dematerialisation. The radio, camera, video recorder, GPS, calculator and calendar are disappearing from the physical world as they’re being built into the smartphone. The wallet will dematerialise next with the advent of online transactions and cryptocurrencies.

Finally, democratisation happens when government, corporates and the wealthy no longer hold control and masses of people have access. Just think, the average South African with a smartphone has access to much more information than the president of the United States of America had 20 years ago.

In the age of exponential technologies, it’s a risk not to take a risk.

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