😔 The “Trap” That Entrepreneurs Get Stuck In

Entrepreneurs are curious people, it’s just in their DNA

The curiosity causes them to dive deep into a project & see massive success!

But the same curiosity can cost them everything.

How? New opportunity.

Split attention is the death of entrepreneurs. You must be very careful where you put your focus.

Here’s what we got today:

• 💰 How I Lost $700,000
  

• 💸 The $180m Risk
  

• 🔎 How To Analyze A New Opportunity

💰How I Lost $700,000

Undisciplined entrepreneurs can get distracted very easily.

Every new idea, business & venture sounds exciting, and you want to jump ship & go onto the next thing.

But that’s irrational and introduces a lot of new risks.

In fact, I purposefully resisted this for the first 4 years of building my business. I knew it would be a distraction.

Eventually, I saw an opportunity that was “too good to pass up”.

It was great and would have worked. But I executed wrong by going all in, in an irrational way.

I was 19 years old, making about $120,000 a month in take-home income from my business, and I shut down the entire thing (that I worked 5 years on) to start something new.

Not surprisingly, my blind faith cost me $700,000 in losses.

A business partner screwed me, I was not detail-oriented enough & was just trying to make money as fast as possible.

My fault.

More often than not, your energy is best spent on the thing that already has momentum.

Like they say: “split attention is the death of an entrepreneur”

If you don’t have something with momentum yet, pick one thing & stick to it.

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💸 The $180m Risk

Everyone is familiar with Elon Musk & his vast wealth.

Elon owns 3 companies worth over a Billion (one is worth nearly a trillion - Tesla).

What some people might not know is how Elon got the money to fund those 3 ventures: Paypal

He was one of many partners and pocketed a cool $180m for himself when they merged with eBay back in 2002.

Elon took ALL of the $180m, and re-invested it as follows:

• $100m into SpaceX
  

• $70m in Tesla
  

• $10m in Solar City

To quote Elon, “I had to borrow money for rent”

This level of all-in commitment is common in the business world.

Entrepreneurs, especially startup founders, are notorious for taking big risks & putting all their chips on the table.

They think, talk, move, and make decisions quickly.

Just like the impulse decision Elon made to buy a $1m car, which he then wrecked without insurance….. Click here to see the car (it’s worth $25m today)

And anyone who slows them down with questions “just doesn’t get it”

This level of irrational confidence is what leads to some big wins. But more often than not, some nasty losses.

🔎 How To Analyze A New Opportunity

There’s 2 scenarios in which an opportunity presents itself:

1. When you are searching for it
   

2. When you are not searching for it

If you have nothing going yet, I’m all for jumping into something new. If you are trying to get a business off the ground, you don’t want to wait around.

Weigh the risk/reward and understand it completely before you start something new.

This is my decision making framework for any new projects:

#1: Will this hurt my current business/income in any way?

If so, is it by more or less than 50%? (that’s the maximum exposure I’m willing to risk)

#2: Can I do this in my spare time without taking away from my current projects?

If the answer is no, I am unlikely to do it. I add to my workload, not replace.

#3: I determine the worst-case scenario.

Most people don’t do this. I play out every scenario. From what happens if my partner steals all my money, the bank account gets frozen & we need funds…. Everything. You need a plan.

You must be careful when starting a new businesses.

In fact, this business (Profit Snack) was the first new business I have started in 7 years except for the $700,000 mistake

Every inch of Profit Snack was planned out from a financial & risk perspective before we had a single subscriber (although we didn’t expect the name change lol)

“The grass is not greener on the other side. The grass is green where you water it”

Focus on one thing at a time. It will give you the best chance at success

Keep crushing it,

Profit Snack team

Comment in the poll below the one thing you are focusing on. Maybe we can help.