Principle #1: Take fewer risks as you get older
When you are young, you should be doubling down because you don’t have much to lose. If you are in your early 20s or 30s, you probably don’t have as many commitments as people in their 40s or 50s do.
If you are in your late teens or early 20s, you can probably live with your parents, avoid bills and focus on going to school, and/or building a business. During this period in your life, you should be placing as many bets as possible and doubling down when you see fit.
When you get older, you have more financial responsibilities such as a family to support and a mortgage to pay. So, you shouldn’t make as many risky bets as in your younger years because if things go south, they will affect more than just your life.
Principle #2: Never lose your investors’ money
Have you ever heard of two main rules of Warren Buffet? If you haven’t, here they are:
- Never lose money
- Never forget rule one
I can’t say that I have followed Warren’s rules to a T because I have lost money. Chances are you will too. So, I modified his rule because I am a big believer in never losing other people’s money.
Whether it is your family’s money or investors’, you just don’t want to lose other people’s money. And if you do, figure out a way to repay them because if you take care of your investors, they will always take care of you.
Principle #3: Spend 10% of your day thinking about new ways to make money
You don’t have to do this during working hours, but you should spend a portion of your day thinking about ways to make more money. Doing this every day will help you come up with creative money-generating ideas.
Now, this doesn’t mean that you should look to start a new business. Instead, look for new ways to grow your company’s revenue. Think outside the box and look for new marketing trends or waves you can ride.
Once you find these waves to ride, be the first to leverage them. Once a channel gets saturated, it becomes very difficult to leverage.
Principle #4: Over-communicate
The one thing that I love doing is over-communicating. Whether it is with investors, customers, co-workers, or business partners, you have to over-communicate.
I have co-founded a handful of companies, and every time my revenues decline, it’s usually because of communication issues. You can avoid this mistake if you:
- Listen carefully – before you communicate, you need to understand what the other party is asking for.
- Communicate regularly – come up with a regular schedule. That way people know you care about them.
- Be clear and concise – what makes sense to you may not make sense to others. Make sure you are descriptive.
- Stop whining – use facts when communicating. Complaining or putting blame on other parties never helps.
It will take a while for you to sharpen your communication skills, so if you are interested in speeding up the process, you may want to read some of these articles.
Principle #5: Never burn bridges
It’s just a matter of time before someone screws you over. It happens to all of us. The shitty thing about it is that the other party usually doesn’t think that they are screwing you over.
Instead of getting upset, however, talking trash, and burning your relationship, you should just let things go. You never know when that person can come in handy. Who knows, they may even realize what they did was wrong.
I’ve been burned a ton of times, and once it even cost me a million dollars. But there were other times when the people who burned me apologized and made me a decent amount of money later.
Principle #6: Spend 10% of your day networking
I’m a big believer that you don’t have to be great at what you do to make money. You just have to be well connected. Going to local networking events, blogging, and participating on the social web are good ways to network.
Heck, if you really want to network, go get an MBA from Harvard or Stanford.
If you don’t think networking is important, just look iCrossing. iCrossing is a marketing agency that sucks at marketing so much that they don’t have the best reputation in the Internet marketing world. But the people within the firm are so well connected that they were able to bring in millions of dollars in revenue and ended up selling the company to Hearst for $325 million.
Principle #7: Never bail on business partners or investors
For some reason, it is considered “ok” to leave a company you founded. And to make it worse, many of these entrepreneurs had taken on millions of dollars of investment from venture capitalists.
I don’t give a shit if you hate what you are doing, but you never leave a team member or investor stranded. If your company is making millions of dollars in profit and your co-founders/investors feel that you are not needed to keep growing the business, then that’s fine, you can leave.
But if that’s not the case, you’d better stick it out with your investors and co-founders.
There are a lot of different business philosophies that you can follow. The 7 above just happen to be the ones I live by. Follow what works for you, and, most importantly, do what’s ethical.
Do you know of any other business philosophies that we should all be following?