How to Overcome Failure In Business

Summary

Whether you are wanting to improve an existing business or start your own, the number one skill you need to learn is copywriting.

Copywriting is the foundation for any business where you have to sell something, whether it be a product or yourself.

You’re probably thinking “How do I get good at copywriting, even with no experience?” One of the best copywriting tips for beginners is to train your brain to think like a copywriter.

You have to subconsciously engrain the words in your brain and in this video I go over how I did it, and how anyone can learn copywriting without being a copywriter first. If you enjoyed this tip, like and subscribe, and leave a comment with any questions about copywriting.

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Transcript

The Importance of Failing

Let’s talk about failure. Now, there are two types of failure in business. There is temporary failure and there is permanent failure. And in my mind, the ultimate failure is giving up forever and just never going back to try again. And for a lot of people, this happens immediately, maybe after one or two tries, and it’s not necessarily their fault.

It’s I, in my opinion, largely a product of the school system, which teaches you never to get the wrong answer, but as you’ll learn in this video, you only need to be right once.

So let’s talk about how to increase your rate of failure so that you can find success faster. Let’s do it.

This is something I’ve bringing up a lot lately and a see idea of a risk portfolio. And just like we need to diversify our risk in the stock market. We also need to diversify our risk in our personal actions.

We take to develop ourselves as a product. Now, the best example of this is venture capital firms. So a venture capital firm, if you don’t know, is basically a company that collects investors money, and then they take that money and they go out there and they invest in startups.

Now they did a study where they surveyed 2000 investments in companies where at least a million dollars was invested. Now, remember that venture capital firms are professional investors.

That means they’re hypothetically the best in the world at picking companies that have the greatest chance of massive success. Now in the study out of the 2000 companies, 75% of those investments failed to return investors money.

How To Fail

So that means the best startup pickers in the world failed 75% of the time. What does this mean for you? Well, let’s look at the strategy behind VC investing. They’re going to go out there and let’s say a fund.

They might develop a fund that lasts for five years and they’re going to go, they’re going to take this money. They’re going to invest all of the money into 10 different companies. And over five years, they’re going to pay back the investors money and then give them the returns.

So let’s say that they pick 10 on average seven and a half of those companies are going to completely fail. None. Does that mean it’s a bad VC firm? No it doesn’t. And if you’re like, what are you talking about, Christian? I’m not a VC firm. This applies to your life and how you’re directing your time, energy and money.

So you might want to listen to the strategy behind this so that you can apply it in your own life. So seven and a half out of those are going to fail.

Now, one or two of the other ones might return the investors money, but not a huge return now where VC firms win. And what they understand is that one of those companies is going to return a thousand times on the investor’s money. And so that one company, one out of 10 is going to make up for all of those other losses and then understand this very well.

So they don’t get upset or they don’t quit. They don’t say, Oh, he made a mistake. When one of those companies fails, it’s part of their portfolio. Just like you need to have your own risk portfolio in life. And so, as long as they hit that one out of 10, it was all worth it.

But guess what? They don’t get to have the one out of 10 that hits a thousand X without investing in the other nine, because they cannot predict the future. They do not have a crystal ball that says based on our knowledge, this company will succeed or fail. They can only make their best guests.

So I’ve talked about in previous videos, how everything in life is like a poker bet, and you can play the hand perfectly and still lose, or you can play the hand wrong and still win. And so what we want to do is make good decisions consistently over time, knowing that most of them will fail, but some of them will hit so big that it will make up for all the other ones.

So how does this apply to our life? Well, to use the baseball analogy, you have to step up to the plate and swing, right?

You can’t play poker without losing some hands. So if you want to be in the business game, you’re not going to win on every hand that you play. You’re not going to win on every investment than you make, but you still want to be making investments. I’m not talking about investing money in startups.

I’m talking about where do you place your time? Where do you place your energy? What opportunities do you pursue and where are you investing in yourself in education? And so you want to have that portfolio where you might make 10 investments in yourself and education.

And nine of those might be, you know, breakeven, or you don’t really do too much with them. And one of those is going to thousand X, your return, and that’s going to make up for all the other ones. But the point is that you’re in the habit of investing in yourself and looking for those returns, knowing that it is a portfolio, some of it will fail.

How to Not Waste Your Time

And some of it will succeed. Now, VCs have another role where they’re not going to invest in a company that they think is going to grow to a million dollars or 2 million or 3 million or $5 million, because they need that one to get a thousand extra turn to make up for all the other ones, right?

So they’re not in the business of just getting these small, consistent returns. It just is not worth the time and effort and energy for them when they need such a big return on their investors money. So they’re going to go out there and they’re going to look for asymmetrical returns.

That means the return on the investment is disproportionate to the energy or the time or the money that you’ve put in it. So when you’re out there and you’re looking for opportunities in your own life for business, for education, you want to pick things that have the potential for an asymmetric return.

So maybe something that can return a hundred times your investment. So if you’re investing in courses and you’re looking at thousand dollar courses, you might want to make sure there’s an opportunity that you can make a hundred grand from that investment over the next couple of years. And again, I might hit, I might not, but make sure there’s at least the opportunity for that hundred X return.

Now, if you’re making a bigger investment in yourself or in your business or in a staff member, let’s say you’re spending $10,000 on mentorship. You might want to make sure that over the next five years, that has the potential to return you a million dollars, which isn’t too hard, right? That’s 200 grand over five years in the business world.

That’s nothing too crazy, especially for a big investment, like $10,000. So you want to calculate these returns before you invest the time and the energy and the effort into a new business, into a new mentorship, into more education, into a new line of products that exploits a different area of the market.

How to Choose Where to Focus in Business

Does this have the opportunity to at least return us a hundred X, even if we’re not positive that it’s going to come back to us.

And so when you build your portfolio like that, you look at the opportunities that have asymmetric returns. They don’t just have the opportunity for one exit two X or five X, 10 X. We have at least a hundred X return on the table. Over time. Our portfolio of risk will balance out. And even if we lose nine out of 10, we have the 10th one to make up for the other ones.

So that’s how VCs think act and behave in the wild. And I think most of us could learn a lot from them because although they’re professionals and they’re the best in the world of what they do, they still fail 7.5 times out of 10, just like you will entering your own business career.So when you fail, do not say to yourself, I’m bad at this I’m wrong. I don’t know what I’m doing.

The professionals don’t know what they’re doing. 7.5 out of 10 times, just to understand that your action is part of your portfolio. And as long as you hit those big wins, one out of 10, you’re going to be just fine.

So let’s say you start up a new funnel in your business to bring in new customers. It would be kind of dumb to just launch one and hope that it wins. If that has a potential 200 extra business, right? And if you’re just starting out, you made $10,000 this year. Uh, you have plenty of potential to a hundred extra business.

So it would be kind of foolish to launch one funnel and then make a judgment about yourself, about your business, about the opportunity based on that one funnel, knowing that the pros feel 7.5 times out of 10.

So what if instead we launched 10 funnels and we said, it’s our goal to fail on nine of these and have one of them hit. But that one we’re going to scale to seven figures.

So let’s put in the time, the energy, the effort to research and write and launch and test 10 completely different customer acquisition funnels, and be perfectly fine with the nine of those failing. That is our funnel portfolio. So let me know in the comments, does this make sense?

Does a risk portfolio in your own life with how you spend your time, energy, effort and money, make sense? If so, understanding that you’re supposed to fail the majority of the time.

As long as you can get an asymmetric return on one of those investments, what are you going to do differently in your life? Do you think you could take some bigger swings and be okay with them not working out, knowing that’s part of playing the game.

Are you gonna change anything you do this week? Let me know in the comments also, don’t forget to like subscribe and hit notifications. So you get the next video that’s offered late. It’s Christian, the work from anywhere, digital marketing guy. See ya on the next one.