Advertising
Advertising

11 Mistakes Billionaires Learned the Hard Way

11 Mistakes Billionaires Learned the Hard Way

It’s been said it’s easier to learn from your mistakes, but you don’t always have to, particularly in business. Working your way to the top can be extremely difficult and mistakes in the business world can be costly. It is important for the entrepreneur to learn not only from their successes, but also from their failures. Although there’s much to gain when it comes to experience, you can save a lot of time and money by learning through the mistakes of others.

Even today’s top grossers have had their dull moments. Here are 11 mistakes billionaires learned to avoid the hard way:

The 1 Percent
    1. Failure to research.

    When making an acquisition or starting a new business, research is essential. Is there competition? Is there a big enough market? Is your acquisition worthwhile? In 1999, the world’s richest man, Carlos Slim, did not do his research and acquired CompUSA for $800 million, only to see the company’s value plummet because desktop computers were quickly being replaced by laptop computers and other emerging technology.

    Advertising

    2. Fixation on the wrong investments.

    Few things are worse than a missed opportunity. Focusing on the wrong investments can bring disastrous results. Take Bill Gate’s mistake of ignoring search engines, for example. Focusing on the loss of profit that came from piracy lead Microsoft to completely ignore the development of the search engine. This neglect left plenty of space for other companies, such as Google and Yahoo, to fill the gap. By the time Gates realized he had made a mistake, it was too late. Presently Bing has picked up some of the search engine market, but in 2011 it cost Microsoft $2.5 million more than it earned.

    3. Lack of communication.

    When offering goods or services, communication from the top directors to the employee team and from the employees to the customers is vital. You cannot expect the members of your team to immediately know what you are thinking and this is a mistake billionaire Larry Ellison experienced first hand. After acquiring Island Air, Paul Casey was quickly appointed as CEO. The lack of communication that ensued regarding the changes resulted in various flight delays (one of which was seven hours long) and many disgruntled customers.

    4. Cutting vital costs.

    Maximizing profits and cutting unnecessary costs is a natural part of business. However, it’s easy to get lost in the profit frenzy and so one should be careful such costs do not damage quality or the brand. Take for example the case of billion-dollar company Hewlett Packard. Once known for innovation, everything started to go wrong once innovation was replaced by cost cutting. Current owner and CEO Meg Whitman has seen stock price plummet 39% from one year ago.

    Advertising

    Billionaire Status

      5. Letting good opportunities go.

      If you think you have a good idea or your research has proven your idea to be a sound choice, go for it. Do not let a good opportunity go by, because just like you are capable of coming up with great ideas, so are other people. Larry Page of Google learned this the hard way. In 2003, after he noticed the success of Friendster, he offered to purchase the then social media giant instead of focusing on developing his own. The offer was turned down and the result was disastrous, as Facebook swooped in to take the social media market by storm. Google+ was eventually released in 2011, and to this day has yet to match the social capital and earnings of Zuckerberg’s giant.

      6. Refusing to explore other options.

      Not all acquisitions are in great shape, and sometimes the industry you want to focus on may be shrinking. These things can difficult to accept but it is important to know when to explore other ventures. Billionaire Warren Buffet admits to having made this mistake when purchasing Berkshire Hathaway on emotional impulse in 1964. A New England textile company at the time, he kept the original business running at a loss for 20 years, before finally giving up and focusing on the company’s other, more profitable ventures.

      7. Cultivating a negative image.

      When you are a billionaire and have a brand to protect, you must behave like it. Anything negative that is said about you will reflect badly in your company and this is a mistake Alice Walton, heiress of the Walmart empire, has committed. Walmart is already involved in numerous controversies regarding the giant’s effect on small businesses and wages paid to workers. Walton’s own Texas escapades, which included a DWI, are negative publicity and include a mug shot no PR executive can wipe from Walmart’s already negative record.

      Advertising

      8. Allowing credibility to plummet.

      A lot of business ventures depend on credit lines. It is important to remember that this is not only about paying your bills, but also about paying them on time. Used-to-be billionaire Eike Batista saw his oil and mineral empire plummet from more than $30 billion to a mere $200 million once key stakeholders lost trust in him after he failed to deliver the results he’d promised. Once Batista lost credibility in one area, he quickly lost it in all of them, and was forced to watch his empire shrink.

      9. Hiring the wrong people.

      Hiring is an important part of every business. Human capital is what makes a company prosper, but when hiring, keep in mind the ideals of each new hire and whether or not they fit with the company. A bad hire in an important position could be disastrous. Billionaire philanthropist Manoj Bhargava admits the worst business mistake he’s ever made is hiring the wrong people—those who enter his charity wholesale business hoping to help themselves instead of helping others.

      10. Being afraid of postponing.

      It is important to jump in to big opportunities; however, it is also important to do self-assessment to know whether or not you and your team are prepared for the next move. Billionaire Oprah Winfrey cites her TV network, OWN, as one of her biggest mistakes. Her blunder? Launching when she wasn’t ready to launch and doing so only because she said she would.

      Advertising

      11. Taxes? What taxes?

      It hasn’t been proven whether or not billionaires avoid taxes more than the average citizen. However, a tax scandal is one of the most difficult things to recuperate from. The Beanie Baby creator, billionaire Ty Warner, barely escaped jail for allegedly owing $25 million in taxes, a report that will undoubtedly damage both his brand and reputation.

      Billionaire Make It Rain

        These are 11 mistakes that forced billionaires to clean up their act. As an aspiring billionaire, you should be able to learn from the mistakes of others and take these eleven points to heart as you continue your journey.

        Have you hit a stumbling block before that taught you a valuable lesson? If so, I would love to hear about them in the comments below.

        Featured photo credit: Flickr via flickr.com

        More by this author

        Joel Goldstein

        Entrepeneur

        How to Build Healthy Competition Between Millennial Employees? 4 Visual Merchandising Tips for the Holidays How To Succeed At Your First Sales Job 5 Signs You’re Not Meant to Be A Salesperson Follow These 4 Tips to Make Your App Millennial-Friendly

        Trending in Productivity

        1 Productivity Boost: How to start your day at 5:00 AM 2 How to Work Hard the Smart Way: 4 Daily Rituals to Follow 3 Your Night Routine Guide to Sleeping Better & Waking Up Productive 4 74 Healthy Habits That Will Drastically Improve Every Aspect of Your Life 5 How to Increase Willpower and Be Mentally Tough

        Read Next

        Advertising
        Advertising
        Advertising

        Last Updated on May 7, 2021

        Productivity Boost: How to start your day at 5:00 AM

        Productivity Boost: How to start your day at 5:00 AM

        I have been an early-riser for over a year now. Monday through Friday I wake up at 5:00 AM without hitting the snooze button even once. I never take naps and rarely feel tired throughout the day. The following is my advice on how to start your day (everyday) at 5:00 AM.The idea of waking up early and starting the day at or before the sunrise is the desire of many people. Many highly successful people attribute their success, at least in part, to rising early. Early-risers have more productive mornings, get more done, and report less stress on average than “late-risers.” However, for the unaccustomed, the task of waking up at 5:00 AM can seem extremely daunting. This article will present five tips about how to physically wake up at 5:00 AM and how to get yourself mentally ready to have a productive day.

        Many people simply “can’t” get up early because they are stuck in a routine. Whether this is getting to bed unnecessarily late, snoozing repetitively, or waiting until the absolute last possible moment before getting out of bed, “sleeping in” can easily consume your entire morning. The following tips will let you break the “sleeping in” routine.

        Advertising

        Relocate your alarm clock.

        Having an alarm clock too close to your bed is the number one reason people simply cannot get up in the morning. If your alarm clock is within arms reach of your bed, or if you can turn your alarm clock off without getting out of bed, you are creating an unnecessarily difficult situation for yourself. Before I became an early-riser, there were many times that I would turn off my alarm without even waking up enough to remember turning it off. I recommend moving your alarm clock far enough away from your bed that you have to get completely out of bed to turn it off. I keep my alarm clock in the bathroom. This may not be possible for all living arrangements, however, I use my cellphone as an alarm clock and putting it in the bathroom makes perfect sense. In order to turn off my alarm I have to get completely out of bed, and since going to the restroom and taking a shower are the first two things I do everyday, keeping the alarm clock in the bathroom streamlines the start of my morning.

        Scrap the snooze.

        The snooze feature on all modern alarm clocks serves absolutely no constructive purpose. Don’t even try the “it helps me slowly wake up” lie. I recommend buying an alarm that does not have a snooze button. If you can’t find an alarm without a snooze button, never read the instructions so you will never know how long your snooze button lasts. Not knowing whether it waits 10 minutes or 60 minutes should be enough of a deterrent to get you to stop using it.

        Advertising

        Change up your buzzer

        If you use the same buzzer day in and day out, you begin to develop a tolerance to the sound. The alarm clock will slowly become less effective at waking you up over time. Most newer alarm clocks will let you set a different buzzer tone for the different days of the week. If you change your buzzer frequently, you will have an easier time waking up.

        Make a puzzle

        If you absolutely cannot wake up without repetitive snoozing, try making a puzzle for yourself. It doesn’t take rocket science to understand that the longer your alarm is going off, the more awake you will become. Try making your alarm very difficult to turn off by putting it under the sink, putting it under the bed, or better yet, by forcing yourself to complete a puzzle to turn it off. Try putting your alarm into a combination-locked box and make yourself put in the combination in order to turn off the alarm — it’s annoying, but extremely effective!

        Advertising

        Get into a routine

        Getting up at 5:00 AM is much easier if you are doing it Monday through Friday rather than sporadically during the week. I recommend setting an alarm once that repeats everyday. Also, going to bed at about the same time every night is an important factor to having a productive morning. Learn how much sleep you need to get in order to not feel exhausted the following day. Some people can get by on 4-6 hours while most need 7-8.

        Have a reason

        Make sure you have a specific reason to get up in the morning. Getting up at 5:00 AM just for the heck of it is a lot more difficult than if you are getting up early to plan your day, pay bills, go for a jog, get an early start on work, etc. I recommend finding something you want to do for yourself in the morning. It will be a lot easier to get up if you are guaranteed to do something fun for yourself — compare this to going on vacation. You probably have no problem waking up very early on vacation or during holidays. My goal every morning is to bring that excitement to the day by doing something fun for myself.

        Advertising

        As I previously mentioned, I have been using these tips for a very long time. Joining the world of early-risers has been a great decision. I feel less stressed, I get more done, and I feel happier than I did when I was a late-riser. If you follow these tips you can become an early-riser, too. Do you have any tips that I didn’t mention? What works best for you? Let us know in the comments.

        Read Next