While I’m tagging along with my wife at Podcast Movement in Philadelphia, enjoy this guest post from my friend Eric Bowlin.
Like a lot of concepts, serial entrepreneurship might sound amazing at first.
Anecdotally, it seems that if you ask a young man about the idea of having a second girlfriend, he might say:
Let me get this straight, I can have as many as I want? Count me in!
But if you go back and ask him ten years later, he might say:
I barely have the energy for one, I don’t even want to think about a 2nd or 3rd one.
On the other hand, I don’t think I’ve ever met an entrepreneur who could say no to another project if the opportunity presented itself.
The problem is that some people are too quick to jump into something that should require a lot of devotion. They are similarly too quick to move on when times get tough.
There is Value In Knowing When to Fail
Have you ever heard this saying?:
Don’t throw good money after bad.
This term is really just an explanation of a sunk cost – investing more in a failed idea won’t allow you to recoup your initial investment. You’ll just waste twice as much.
Silicon Valley has taken this to another level with its quick “fail and pivot” way of growing business.
Essentially, if you start a new business, product, or service and don’t get immediate results with little investment, dump it and move on to the next project until something sticks.
This mentality has driven innovation to unbelievable places in technology. A lot of it has to do with how flexible and replicable technology can be making it a lot less applicable in other areas of the economy or life.
Regardless, there is a valuable lesson here.
Don’t be afraid to fail.
By acknowledging failure, you can break up with your current project and move on to something more productive.
But, There is Value in Knowing When to Double Down
I was talking to Mr. 1500 recently and he brought up a great point and said there is value in failing fast, but there is also value in seeing something through.
I couldn’t agree more.
The “fail fast and pivot” mentality that pervades Silicon Valley startups keeps technology and innovation moving, but what if they had stuck with it for another few months? It may have worked out, or not.
History is full of failures who’s persistence eventually caused them to make it big.
I’m sure history is also full of people who devoted their entire life to bad ideas, but history doesn’t write about those people.
So, when do we “fail and pivot” and when do we put our heads down and push through?
I think the key is to look deeper at ourselves and our nature.
The Shiny Object Syndrome
Pretty much everyone suffers from this because it is way more exciting to start something than to finish something.
- Dating is way more exciting than marriage.
- Starting a remodel is way more fun than finishing up the 57 item punch-list.
- Rehashing content year after year is so dull compared to starting up a brand new blog.
…and that’s why the world is full of unfinished remodels, empty blogs, and broken hearts.
I learned this lesson several times over the years. I started several businesses related to real estate, but not part of my core strategy of investing.
Each time I went down a new path I learned and grew. Each time I earned some money, but I always felt like I swimming against the tide. Things just weren’t taking off like I wanted.
I didn’t really understand it, until…
The $25,000 Day Off
I was working 12+ hours per day, 7 days per week. I was running a contracting crew, working with homebuyers as a real estate agent, and dealing with my rental properties.
I was exhausted. So, I took a day off.
I actually felt horrible about it. I had to pay one of my guys a few hundred dollars to do the work that I could have been doing. The frugal me was not happy about that. But, I really needed to rest.
I was sitting around the house and randomly decided to browse the MLS. After an hour or two of that, I had seen basically every deal in the market.
Later, I went back and happened to see something listed in a way that normally wouldn’t attract me, but I figured I’d check it out.
I went to see it. I liked it but it was too expensive, so I made a low offer. After a little negotiating we came to an agreement and about a month later I closed the deal. It netted me a cool $25k almost immediately and provided passive income that I enjoy to this day.
Later, I dubbed it my $25,000 day off because if I hadn’t taken that day off, I would never have found the deal.
I realized my other businesses were what was holding me back. The businesses that were currently earning me money were actually what was making feel like I was swimming against the tide.
I was suffering from Shiny Object Syndrome.
When I Stopped Cheating
Like many young entrepreneurs, I’ve flirted with 100 different business ideas in my quest for Financial Independence over the last ten years. I’ve even had some summer flings and a full-blown affair once.
But, I always seem to go back to my one true love.
I found her and settled down with her pretty young at the age of 24.
Then, I started to get bored with the routine.
My mind was wandering off and thinking about all the other opportunities out there. So, I found one and started chasing her.
Sure, it was a lot of fun at first. But, then I started to settle down again and realized I was just as tired of the routine as before, so my mind started wandering again.
Soon, I found I was still in a routine but had 3 or 4 times the amount of responsibility. My love for the chase had saddled me and put me further away from my dreams.
I didn’t realize it, but, by spending my time focused on chasing new dreams, I was taking my eye off of growing and nurturing what I already had. Of course, I’m not talking about marriage, but my business.
After I cut everything out and focused just on my true passion, my passive income and net worth have exploded.
While I do find myself eying a beautiful… opportunity… once in a while, I just think about the lessons I’ve learned and try to stay focused.
That’s how relationships and entrepreneurship are similar.
If you just focused your energy on finding one love and building a long-term and durable relationship, you will probably be happier and wealthier than if you divide your attention by chasing too many fantasies.
Eric Bowlin is a real estate investor and founder of the Real Estate Investing website IdealREI. He bought his first small multifamily property in 2009 at the age of 24 and snowballed that into a portfolio of over 30 units, allowing him to retire from the workforce at the age of 30. Since then he has started chasing larger deals and is a general partner on an additional 450+ units in Texas.
Now, he spends most of his time with his kids, blogging, and traveling.
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