There are a lot of smart people that come up to me and say, “Pat, this business thing is a piece of cake. I’m an executive, and I have a degree from XYZ. I’m thinking about being a business owner, and it’s going to be so easy for me.” They go in extremely arrogant and cocky. Then boom, they fail, and then they wonder why. So in the video and article today I get into 12 reasons why smart people fail in business.
Okay, now let’s get right into the 12 reasons why smart people fail in business.
First, I'm starting with Shoshin disappearing as the first reason why smart people fail in business because I don't believe anything is above this, especially for smart people. If you're watching this and think you're smarter than everybody else you meet, rule #1 will bit you in the butt.
Here's why. Shoshin disappears. What is Shoshin? It's a mentality called the beginner's mindset. Once the beginner's mindset goes, regardless of how powerful, wealthy, and influential you are, if you no longer learn and improve and figure out ways to make yourself better, you're toast.
Here's why. People have only been really using the Internet for 20 years or so. Since then we've been through AOL chat, Netzero, MySpace, Friendster, and now have Facebook, Instagram, Twitter, and Snapchat. Business changes so rapidly that it requires you to learn rapidly. So unless you live every day with the mentality, "Man, I know nothing, and I'm going to keep learning," you'll be in trouble.
If Socrates on his death bed stated that the only thing he knows is nothing, and he's one of the most famous philosophers of all time, what makes you and I think we know all this stuff? We don't. So one of the biggest reasons smart people fail in business is if they think they already know enough.
The next reason smart people fail in business is because they're too conservative. Sometimes they've been taught certain things or their mind's already been built up a certain way, and they play it too safe. And in the world of business sometimes it gets ugly and dirty. Sometimes you have to take unconventional risks. You may have to do things you can't read in a book or watch on Valuetainment. So if you're too conservative and are afraid to break rules, you're going to be toast in business.
The next way that smart people fail in business is because they over promise and under deliver. They know so much they come across like, "We're going to be able to do this and that." They make a lot of different promises to everybody, but don't deliver. And eventually, people say, "I don't want to do business with this person." If you're going to make promises to people, you better deliver.
Here's a story about how I learned the importance of delivering on what I promised.
Listen in here for how being fact driven can cause smart people to fail in business.
The next reason smart people fail in business is the me mentality. This is a tough one because one challenging thing about smart people is they focus on "me." They want to build their resume. We get people that come and go. A lot of people want to work with me just to say, "Hey, I work with Patrick Bet-David on Valuetainment." They want to add it to their resume. Those are the ones that come and go.
But there comes a time in life when you realize it's not really about you and me. Let me explain to you what I mean by that. If you want to build an empire that's really big, if it's only about you, eventually people will realize it, and you won't inspire anybody. When you're around other people, you have to consider their dreams.
One of my favorite conversations to have with any of our employees, salespeople, or people I do business with is to ask, "What's your vision of life? What do you want to do? How do you see yourself? What type of role do you see yourself being here on the team?"
This is an important question because this thing called life can quickly change. So it's important to help people see their purpose. You can be a king maker instead of a king. It can't be all about you. Business is all about being a king maker, taking somebody that's a nobody in the company yet and developing them so they have responsibility among other people. That's the king maker. You find out exactly what people want and develop them.
Listen in here for how entitlement is a reason smart people fail in business.
The next reason smart people fail in business is they won't admit mistakes.
Here's something I learned a long time ago. Do you know the fastest way to end an argument if you're at fault? Say, "I'm sorry. It's my fault."
My wife and I got into heated arguments. I'm talking heated arguments that belong in movies. Eventually I got tired and realized there was no purpose in the argument. So I just said, "Babe, you're right. This was my fault." So I started 100% right off the bat saying, "It's my fault." Now remember, everyone, including me, has an ego. But both of us saying, "It's my fault" became a culture in our relationship.
We all make mistakes. I don't walk on water, and don't want to be known for being perfect and walking on water. And neither do you. Having to act like you're so perfect is a lonely place to be.
Next, sometimes smart people fail in business because sometimes they are so logical, they don't sell vision. You have to sell vision, and where you're going. Fact driven and lack of selling vision are similar. But you have to always know where you're going, and where the company's going next.
The next reason smart people fail in business is because they try to outsmart hard work. Listen in here to learn what I mean by that.
Next, no high road. Let me explain to you what about high road. Sometimes when you build a business, your people will teach you a lot. The people around you will teach you a lot because you're not the smartest person in the room. Collectively, we can all learn a ton.
One of the most popular videos I've made is the 12 mistakes I made my first year in business. No wonder it's one of the top five most popular videos I have on YouTube because people love finding out about the dumbest mistakes I've made.
But I started attracting people who were extremely successful in the past. Sometimes these guys brought their egos. I brought on a couple of guys that were extremely hard working and at times, they were difficult to work with. Seven out of 10 arguments with them produced nothing, so I gave them the victory. But I didn't compromise in the three that could hurt them in business and kill them.
The thing that I had to learn was to take the high road, and smart people have a hard time taking the high road. But you have to pick and choose. Out of the 10, you don't have to win every argument. There are two or three that you cannot compromise, but the other seven, it's their ego, so let them win the ego part. Just give it to them.
I had a very big negotiation about a year ago. A person said something that really, really annoyed me. I took the high road, and we came out and negotiated. We're going to end up doing $10 million with that person this year. It's not bad to do $10 million in one year with one company. That just kind of happened accidentally. But I had to figure out a way to take the high road because I don't need to win every single argument, just the ones that really matter.
The next way smart people fail in business is because smart people are afraid of adapting. Let me explain why. When we have to change, it means that the existing us isn't good enough. And smart people don't like it to be known that they're not good enough. Smart people have been told they're smart all their lives. And now all of a sudden I'm telling you that you're not good enough and have to change? Yes, you're not good enough. You and I are not good enough to get to the next level we want in life. You have to adapt and change to be able to get there.
Smart people have a hard time with this because they live off their resume. "Here's who I am and here's what I've done."
If you're willing to adapt and change, you give yourself a fighting chance to make it in business.
Another reason smart people fail in business is that they're unwilling to get their hands dirty. For example, I've interviewed some guys that said, "I would never start at the bottom. I went to college and have a degree from such and such place. I need an executive position." Oh my gosh, I'm the wrong employer for those people. You have to go somewhere else because we don't do that here. I have zero time for that.
I once hired a girl that was unwilling to do the dirty work, but wanted to make millions. Her attitude was, "But you don't understand who I am, what pedigree I come from, and what university I went to."
Now watch this. I have another girl, Maral, who went to UCLA. She started working for me when she was 22 or 23 years old. I wish I had taken pictures of her at the time because she had bags under her eyes, because when she finished her job here at 6:00, she stayed until 10:00 doing her homework while she attended Woodbury University to get her MBA.
Maral came in, humble. She had her degree from UCLA and then went on to get her MBA from Woodbury. She's willing to work and get her hands dirty, no problem. And guess what? She owns a piece of the company. And I have no problem with that, because she had no problem getting her hands dirty.
A Final Word to Smart People in Business
To all the smart people that are watching this, listen. Adjust. You're not as good as you think you are. You can do a lot more. And doing so will make you a lot more money. You can become famous if you realize you're not as smart as you think you are.
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