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Why do most entrepreneurs fail to "be rich"?
They don't understand what rich means. For many entrepreneurs--especially in Silicon Valley--it's evil and dirty to charge for a product. So does "rich" mean being in the press? Or running a profitable company? It's critically important to understand what [being] rich means--and it's usually only partially about money.
What are some common misconceptions about personal and business finances that cripple aspiring entrepreneurial ambitions before they get started?
- We think we have to be rich to start investing in our business. Not true, especially today when you can start a website, launch a product and begin marketing for under $100.
- We think we can do it all and have difficulty outsourcing. We think nobody can do it as well as we can. Guess what? You're not that important--or you shouldn't be. If you're irreplaceable, that means you have a scaling problem. Over time, do an 80/20 analysis and figure out what you can outsource.
- We think we're different than people who've come before us. So many entrepreneurs go into markets where previous companies have repeatedly failed--without ever understanding why! Why not spend a few weeks (or months) understanding the market and customers before jumping in?
How can young entrepreneurs overcome fears and obstacles?
Get out of your room and start talking to people around you. The best $20 you'll ever spend is taking someone in your market out to lunch, whether it's potential customers or business owners in your market. You'll quickly find out that your idea is crazy, or your pricing is wildly off, or your customers don't care about this, but they really want that.
What poor financial habits and methodologies lead to entrepreneurial failures?
The overall problem is trying to use willpower to overcome problems. Yes, willpower is important--but systems are more important. For your personal finances, you want to build a system to automate your finances. For your business, it's also important to build systems to get more leads, qualify them and convert them into customers. Trying hard is important, but building systems to scale is critical.
What sort of no-B.S. straight talk would you give Gen Y entrepreneurs with bad financial habits?
Most of us spend our entire lives complaining and worrying about money, yet we never spend 2 hours reading a good personal-finance book. There's not going to be some magical day where you have unlimited time to figure out your finances. And let's be honest--nobody wants to be a personal-finance expert. Spend a little while, automate your finances, and get on with your life. A rich life is about so much more than money.
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