This article is part of a series on strategies and hacks of self-made billionaire entrepreneurs. We divided it into eight parts: Charlie Munger, Warren Buffett, Ray Dalio, Jeff Bezos, Elizabeth Holmes, Steve Jobs, Reid Hoffman, and Elon Musk.
Billionaire Entrepreneur Strategy:
Until I read billionaire Charlie Munger's Poor Charlie's Almanack, I thought the key to success was creating a vision, setting goals, and working hard toward them every day.
If I failed, I thought it was because I did one of these steps wrong.
Charlie Munger, Berkshire Hathaway vice chairman and long-time Warren Buffett business partner, shows another equally important path to success; thinking through what can go wrong.
Things constantly go wrong no matter how smart and hardworking you are. Realizing this, Munger continuously and methodically considers every way a plan could go wrong and plots out how to avoid each obstacle.
"Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don't we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead--through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I'm going to die so I don't go there." Munger says.
Munger's approach helps him avoid roadblocks and be more prepared when he inevitably runs into one. Furthermore, combining goal setting and obstacle avoidance is backed up by a growing body of over 100+ academic studies on the topic. When people only 'fantasize' about the future, they actually end up taking less action than they would if they also thought about what could go wrong and made plans to avoid it.
Bottom line: Being both pessimistic and optimistic is better than just being optimistic. One of the best ways to win is not to lose.
Billionaire Entrepreneur Hack:
To apply this principle, test your plan with this three-step pre-mortem process developed by Meathead Movers CEO and cofounder, Aaron Steed:
Steed created the process after noticing that certain projects at his 350-person company were getting poor results.
Rather than adding new procedures to help those projects succeed, he developed the pre-mortem process to remove the barriers that were causing them to fail.
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