Do You Have a Business or a Gambling Addiction?
Hustle without strategy, unless you’re incredibly lucky, will likely lead to failure.
Today, many of us are stepping away from the traditional “safe job” mentality and starting down the freelance, small business or entrepreneurship path. From every corner of the globe we hear stories of success. It might be a business coach from New Zealand making millions selling his online training programs, a freelance writer earning a few hundred thousand dollars a year ghostwriting books, a new healthy food franchise hitting it big, or a new tech startup in Mumbai receiving fifty million in venture capital funding.
Unfortunately, however, these stories of tremendous success are only a small fraction of the bigger picture. More often than not, the venture ends with soul-devastating and, often, family-destroying failure. The Small Business Administration (SBA) notes that a staggering 51% of small to medium enterprises (SME’s) fail within just five years of commencing operations. Robert Kiyosaki also points out that many startup survivors are actually worse off, stuck in self-created jobs working more hours for less pay than they obtained in their previous employment.
What is at the root of these failures? While there are many factors that go into the ultimate success or failure of a business, I’ve found that far too many new business owners have a casino mentality of success. They rely far too much on the idea that if they keep at it and enjoy just a little luck, everything will fall into place.
The problem with “the hustle mindset”
I’m sure you’ve heard people say something like, “Entrepreneurs are the only people who will work 80 hours a week to avoid working 40 hours a that we love the hustle. But no matter how committed you are and no matter how hard you work, trust me; the hustle gets old, FAST. This is the main reason so many self-employed people, even those making decent enough money, re-enter the workforce only a few years later – they don’t want to grind it out 80 hours a week for the rest of their professional lives, even if it’s in their own business.
So is becoming a successful business owner, working your own hours, and earning a great income just a dream? Absolutely not.
The problem is that hustle without strategy, unless you’re incredibly lucky, will likely lead to failure. Think about it – what if I told you that my plan for retirement was to play blackjack for 12 hours a day?
But if you’re willing to dedicate that hard work, time, and energy to a few vital strategic concepts, you’ll greatly stack the deck in your favor.
The vital strategy you’re probably overlooking
For many of us, our startup journey can be traced back to a single moment and a single revelation. After years of working for someone else, focusing purely on the consistent delivery and continued refinement of our core skill, we begin to see ourselves as experts. Our functional skill has grown to an elite level and, with all the stories of success around us, we decide it’s time to go out on our own.
We want a better quality of life, with no one to report to. We want to earn more money, and we know we deserve it. So we make the big decision and say, as Sir Richard Branson articulated so well, “Screw it, let’s do it.”
After all, it’s the next logical step, right?
However, too many entrepreneurs approach business ownership with that casino mentality, hoping they’ll hit the jackpot if they just keep spinning that wheel. They focus on how good they are at their functional skill, commit to working hard, and wing the rest, thinking it will just come with time.
But would you really ever sit down at a poker table and risk all your money without a full understanding of the rules and strategy? Sure, every now and then you’ll win, but the odds are against you.
One major area where business owners often rely on luck over strategy is actually one of the most important of success factors – their marketing.
It kills me to see so many amazing service providers and business ideas fail, just because they’ve overlooked this absolutely vital step. Especially because it really only takes a few hours of focus to create a marketing strategy that changes everything.
A few years ago, I spoke at the Freelance Conference, founded by my good friend Emily Leach. Emily mentioned that her attendees were getting more and more frustrated that their prospects seemed to care about only one thing – PRICE. That prospects didn’t seem to “get” why these freelancers’ services provided so much more value over their less expensive competitors. She asked me if I could do a workshop to help attendees better convey their value and show them how to get out of competing on price.
I decided to share with them the story of a language coach, Wendy, who had succeeded for years teaching Mandarin; however, due to increased local and global online competition, she now struggled to get new clients and to keep her existing ones. I explained that she, like so many others, originally came to me for sales advice and, while that would have given her some success, it would not have solved her larger problem of fighting with competitors on price.
I then explained how success is gained from avoiding that battle altogether, and how I worked with her to uncover her points of difference. I discovered that she was doing some amazing things for a small group of her clients – executives being relocated to China. The extras she was throwing in without even thinking about it were far outside the functional skill of teaching people Mandarin, and were critical to the executives’ success in a new culture.
I then explained how we transformed her message from “Mandarin teacher” to “the China Success Coach,” and how we created the China Success Intensive, which focused on educating executives and their families on a wide variety of essential skills needed to prosper when they arrived in China – things like the wildly different process of building rapport in business, as well as the culturally specific ways to show respect.
I showed them how Wendy’s business transformed from struggling every day to get clients for $50-$80 an hour in a hugely competitive market, to charging $30,000 for a five-week course. You can see Wendy’s full story in the video below:
I then explained that competing on price is actually a symptom of their other major issue: That people don’t “get” what they do… at least not enough to pay extra for it.
How often do we go to networking events and define ourselves by our functional skill, i.e., “I’m a business coach,” “I’m a ghostwriter,” and so on? And how do people respond? Usually in one of a few ways:
- “Oh, that’s nice.” This lack of interest makes us feel like we need to explain further, but we also feel like we’re forcing something down someone’s throat.
- “Oh, I need a coach/ghostwriter, how much do you cost?” Now we’re in a pricing discussion, but we haven’t had a chance to explain the real value we provide.
- “Oh, I worked with a coach/ghostwriter before, it didn’t work out.” Now we feel like we have to explain why we’re different. Back to forcing something down their throat.
Yet, regardless of the fact that we are horribly unprepared, it doesn’t stop us hustling from networking event to networking event, hoping that if we just keep showing up, we’ll hit the jackpot, and that someone will say, “I need that, and price is no object.”
But how often does that happen?
Wouldn’t it be easier to go to events where you know that there are, as in Wendy’s case, immigration attorneys who work with companies relocating to China, and saying you’re the China Success Coach?
Or in my case, going to small business events where there are a ton of service provider businesses, and saying that I’m the Rapid Growth Guy?
Wouldn’t it be nice to have people respond with interest, and a curiosity to know more?
Then you get to explain, with their invitation, what you do and why it is so different.
We all do things outside the scope of our functional skill for our clients, things that our unique experience and upbringing qualify us to do. The problem is, we don’t think to tell customers about them, which means we miss out on the paycheck these value-added services afford us. And the reason we don’t think to tell customers about them is because they’re the things that just come naturally.
But that’s precisely why they’re so valuable – they don’t come naturally to our clients.
At the Freelance Conference, I ran through a simple five-step exercise to help attendees create their own version of “The China Success Coach,” based on the amazing things they were already doing for their clients, and finally, to identify an ideal niche. (You can access that five-step template for free here.)
At the end of the session I said, “Put your hand up if you now have a unified message that will excite and inspire people to want to know more about you, and if you have identified a niche of willing-to-buy clients, people who will be excited to pay you what you’re worth.” Almost everyone in the room put their hands up, which sounds great until I asked my second question: “Keep your hands up if this is the most time you’ve spent on marketing since you started your business.” Sadly, 85% of the room kept their hands up.
The session was 45 minutes long. You can see the full workshop in the video below:
Too often, people fall in love with the idea of having their own business, but they don’t understand how to market themselves or separate themselves from their competitors.
You wouldn’t go to the casino and gamble your family’s future at the roulette table or slot machines. But a business without a unified message and a niche is exactly that – one big gamble.
The dangers of slot machine decision-making
Most people who start a business know that they’re going to have to put in some work. The problem is, they’re not sure what to do. So they try everything, kind of like taking a crack at every game in the casino. I see business owners trying to implement tactics like PR, podcasting, Facebook ads, paying to speak, SEO, LinkedIn messaging, funnels, going to 100 networking events in 100 days…anything that promises a potential win.
I’m all for getting wins like this, and I’m all for staying on top of trending growth opportunities – but not as the foundation of success. These tactics are best seen as an addition to a thriving business, within a greater marketing and sales system.
You see, while these tactics can provide major results, when performed in isolation, they typically fail. Yes, you might get a win here and there, but unless you employ these tactics as part of a total marketing and sales system, those wins will be small. And if you’re paying for SEO strategists, PR firms, or ads, they’re also expensive. It’s like getting a minor payout at the slot machine after already losing thousands of dollars – and of course, being left unsure when you’ll win again.
These small wins may feel good in the moment, but they’ll never get you out of the hamster wheel hustle.
I suggest you employ those kinds of tactics only after you’ve done all of the following:
- Create a unified message, one that excites and inspires your prospects to WANT to know more. One that is simple to understand and articulate at a networking event and on your website, such as: China Success Coach, Rapid Growth Guy, Authority Architect, Mission Maven.
- Discover your niche of willing-to-buy clients; otherwise, you’re trying to speak to everyone… which is speaking to no one. For example, if I focused on business coaching for everyone, on everything, people would see me as a jack of all trades, master of none. Instead, I focus on serving introverted, service-based small businesses, where to them, as “The Rapid Growth Guy,” I’m the only logical choice
- Create packaging and pricing that stimulates purchasing behavior. Knowing what your niche wants is easy when they’re the only group you work with. And guess what? Now you can charge what you’re worth.
- Create powerful stories that are designed to educate and inspire (like Wendy’s story above) but are also designed to embed credibility and help your niche see you as the exact right choice. I see people get on some of the biggest podcasts, stages, or sales calls – the ones that can make a business prosper for years to come – only to barrage their audience with jargon and detail no one cares about or understands. Stories, not buzzwords, are the key to sales.
- Develop and test out a full sales process, one that leverages the power of story and that embeds your packaging and pricing in the most persuasive place (not just whenever the prospect asks). The sales process should be a well-structured system like all other parts of your business. I explain how to create this process in the first chapter of my book, which you can download FREE here. I recommend you:
- Look at what you currently say and rearrange it as I suggest. (Note: if there are things you currently say that don’t fit in to my 7-step system, leave them out. You shouldn’t be saying them to customers.)
- Fill in any gaps according to the system. (Note: You’re likely lacking emotionally deep, value-driven stories, which I explain in Chapter 5).
If you do just this, you’ll double your sales in the next 60 days.
- Then, build all of this into your online presence. A truly effective online presence starts with an understanding of the real purpose of being online:
- Social media is not about sales, it’s about driving engagement and moving that engagement to your website.
- A website is not about getting prospects to call you or fill out your contact form; that’s like going on a first date and proposing marriage. They just are not ready yet. The number one thing your website should do is offer value in exchange for the prospect’s email address.
- Your email list is not a group of people you just endlessly pitch. You should deliver on your promise of value, while subtly encouraging them to take the action you want (book a call, buy a product, join a webinar, etc).
Now, to many, this sounds like a lot of work.
But how would you feel if, every time you went to a networking event, people were excited about what you do? If all you needed to do was offer some free content and know that the exact right people will end up hiring you? Wouldn’t you enjoy your business a lot more if every client that you speak to has booked a call with you and has waited patiently while consuming your content? What if everyone you spoke to immediately wanted to hire you, and just hoped they could afford it?
Think about how much time you currently spend chasing clients the wrong way, writing proposals, following up… only for them to ghost you or nitpick on price.
Do you see how having a strategy means not having to rely on pure chance? It’s a real, well-structured business, not one that counts on the occasional free spin just to survive.
You wouldn’t start rolling the dice at the craps table without understanding how the game works. So don’t roll the dice on your business without a real strategy for success!
The Jackpot Mismatch
One thing I’ve learned is that I can create a rapid growth business around any product or service. But there is nothing worse than a rapid growth business with customers you don’t love in a business you can’t stand.
Trust me, I know. In 2004 I won a prestigious award in my home city of Melbourne Australia, for founding Australia’s largest business-to-business cell phone brokerage.
You’d think that night I would have gone home, looked out the window of my 47th floor 270-degree city apartment, equipped with every luxury you could imagine, as well as three cars down in the car park, and been one of the happiest people alive.
The sad thing is, it was actually the complete opposite. I was miserable.
While I was making amazing money and had everything I could have ever wanted, I hated what I did. And in truth… If someone mentioned another “phone call rate” to me, well, let’s just say it wouldn’t have been pretty.
I learned first-hand that having a successful business is not like winning a jackpot, because more often than not… you have to work in it, almost every day.
Since then I’ve been responsible for five multi-million-dollar success stories, each moving me closer to what I do and LOVE doing today.
If someone had told me I could have made a choice as to what business I could have started and to really think it through… I could have been doing what I do now, for ten full years longer.
We all want to hit the business jackpot, but we can’t let that desire cloud our decision-making. Too often, I see people jump into a business and make one of the below mistakes:
- Trade in their passions for what’s “practical.” I understand the impulse to make the practical decision, which is often based on the industry you’re coming from, and what you know. The problem is, when you make the practical decision, you struggle to muster the fire in your belly to really get out there and make it happen. And when you speak to people about what you do, they can tell the passion isn’t really there.
Even for those who succeed, it’s usually only a short while before they start to exhibit self-destructive behaviors, such as spending money on things they don’t need, in order to fill a hole in their soul. Or they quickly lose what energy they did have, when the business still very much needs their attention.
- Hedge. Some people decide that they’re going to hedge their bets, and create both their passion business and the practical one. These businesses are doomed to fail. When you start a business, you generally have limited financial resources, and you definitely have limited time. Hedging between two businesses means you need two of everything, such as websites. It also says to the world, “I have not committed to either business.” And to many, it suggests that you’re not that good at either.
- Run after shiny objects. This is the tendency to jump from idea to idea or quick-win opportunity to quick-win opportunity. It’s often the result of not having a big-picture strategy, desperation to make something work, and the belief that the next hot thing is the secret to success. But these business owners have as much chance at succeeding as someone running frantically from table to table in the casino.
Any new business is a risk. But if it’s a chance you’re going to take, make sure you stack the deck in your favor!
One of the exercises I give my clients (which you can access here) is called “Forget about goals, WHY is the key to success.” You’ll find it incredibly helpful to uncover goals that actually mean something to you, that align with your true passion, and not just the ones that everyone has told you that you “should” have.
Make Your Own Luck
In his book Zero to One, Peter Thiel notes that no matter how strong your product, you must still support it with a strong sales and marketing plan.
You might be amazing at your functional skill, but what good does that do you if you can’t make prospects understand that too?
It’s the difference between mindlessly pulling the slot machine handle, burning through your cash, and knowing all that will save you is an unlikely burst of luck… or sitting down at the poker table as a seasoned pro, calling upon your expertise, knowledge, and strategy.
I want you to rely on yourself and your systems, not on blind luck.
In truth, I’m actually not much of a gambler–an the poker table or in business–and you shouldn’t be, either.
If you want to have a successful business doing what you love, then let’s get to work creating your strategy.
Got a question, comment or just want to share your success applying these ideas? Please post it below.