Browsing through a few business history books this afternoon (The Age of Heretics, The Book of Business Wisdom, Brand New), I was struck by two related insights regarding why and how businesspeople become successful.
“Fortune Favors the Bold”
The boldness of business leaders has been a recurring theme in the business media for centuries. Think Bill Gates / Steve Jobs / Larry Page & Sergey Brin setting up shop in the garage with little more than an idea. Here’s the motif: a vision of the future compels the leader to take action, and nothing can deter them from achieving wealth and ultimate success.
Part of this business myth is true: you can’t get abnormal returns if you stick to normal behavior. Having an idea and exploring it in the face of uncertainty is the essence of business practice.
If you want to achieve great things, you must consistently take bold actions. Seeking complete security is the road to complete and lasting mediocrity.
“Fortune Strikes Down the Bold When They Get Stupid”
Bold action alone is not enough – you must know what you’re doing for your actions to create the results you want. Boneheaded decisions don’t build businesses.
Imagine the courageous entrepreneur, armed with a business plan that proposes selling 20+ pound bags of dog food on the internet. No amount of bold action is going to compensate for the fact that shipping heavy objects is expensive, and customers hate paying for shipping when they buy online.
It happened – Julie Wainwright was the CEO of Pets.com, one of the most spectacular tech bubble collapses. She was bold, but didn’t fully understand what makes businesses successful. She learned these lessons the hard way.
Donald Trump seems to be stress testing the bold/stupid line with each new venture, and teeters on the edge of bankruptcy. It seems Trump’s bold statements are merely masking the stupidity – for the time being, at least.
One of the reasons I focus on teaching business mental models is that learning the essentials helps amplify the results of bold people. If you have the courage to test a business idea, a little know-how goes a very long way.
Be bold, but don’t be stupid. Learn the rules and optimal strategies of the game you’re playing. Lady Luck (or is it Madam Probability?) won’t let you win every time, but you’ll win more often than most.
Accurate knowledge + bold action = a force to be reckoned with.