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 How to Break Bad Habits: I Broke 3 Bad Habits in Less Than 2 Months 2 How Long Does It Take to Break a Habit? Science Will Tell You 3 How to Reprogram Your Brain Like a Computer And Hack Your Habits 4 How to Make Changes in Life by Changing Your Habits 5 How to Build a Good Bedtime Routine That Makes Your Morning Easier

        Read Next

        Advertising
        Advertising
        Advertising

        Last Updated on February 19, 2019

        How to Break Bad Habits: I Broke 3 Bad Habits in Less Than 2 Months

        How to Break Bad Habits: I Broke 3 Bad Habits in Less Than 2 Months

        The cycle of bad habits is what keeps us living small and stops us from reaching our true potential. Breaking a bad habit isn’t as hard as it seems; despite being a CEO of a company and raising two children, I still managed to break 3 bad habits I had within 2 months. Yes, that’s quitting one habit in less than 21 days.

        I took steps to eliminate them one at a time. Habits such as drinking Coke every day, slouching when sitting and not having a consistent exercise routine.

        So how did I break these habits? I used the Control Alternate Delete Method (Ctrl Alt Del).

        What is this method and why is it so effective? Read on to find out how to break bad habits with this unique method.

        How to break bad habits with the Control Alternate Delete Method

          We all notice on some level what our bad habits are. A lot of the time we choose to ignore the negative ways these impact us.

          For me, I was sitting most of the day in front of my computer at work in a slouching position. I drank Coke every single day in an attempt to stay awake. I put off any kind of exercise regime because I felt that it was better to just relax and have fun after a whole day of work. As a result, I was leading a really unhealthy lifestyle suffering from weight gain and back pain.

          Advertising

          I needed to make a change.

          I started to read books about building habits such as The Power of Habit by Charles Duhigg, The One Thing by Gary W. Keller and Jay Papasan, and The Now Habit by Neil Fiore. After reading all these books, I’ve come up with my own method to quit bad habits — The Ctrl Alt Del Method.

          I started by focusing on just one bad habit, the first one being the sheer amount of Coke I was consuming each day.

          Every day I applied the Ctrl Alt Del Method and after two weeks, not only did I stop drinking Coke every day (I only drank one can in 2 weeks), but I started the better habit of drinking 8 glasses of water every day instead.

          After eliminating one bad habit, I moved on to the other two with this same method and a month later I was:

          • Hitting the gym twice a week.
          • Improving my sitting posture, not only at the office but also at home and everywhere else, improving my back pain.
          • Gaining core muscle which improved my back pain as well.
          • Losing fat around my waist which went from 36″ (considered obese level) to 32″ (normal level).

          If I can improve my life using this method, then so can you. Using this structure to eliminate your bad habits will increase your success and replace your bad habits with more positive ones.

          Control: Master your desire

            Identify your triggers

            Bad habits such as drinking alcohol, smoking and snacking too much trigger the release of dopamine, a feel-good chemical in the brain.[1] Although you might not like the end result, they give you a positive outcome in the moment. This is pure psychology.

            Advertising

            It’s important to identify what is triggering you to continually act out your bad habit. This isn’t always an easy step because our habits have been built up over a long period of time.

            If you need help in identifying your triggers, here’s a list of common bad habits and their triggers: 13 Bad Habits You Need to Quit Right Away

            Self-reflect

            To help you work out your triggers, do a bit of self-reflection. Ask yourself questions such as:

            • What comfort are you getting from this habit?
            • Why do you need comfort?

            For example, I chose to drink coke because it tasted good and it made me feel good when I was stressed. I slouched only when I sat for too long working on my desk and started to feel tired. I skipped exercises because every day after work I felt I already did enough works and didn’t want to work out.

            If you choose to eat fast food every night, you’re probably telling yourself you’re too busy to cook. But ask yourself why? What are your priorities?

            Maybe you have a lack of self-worth that means you don’t have the self-love to want to look after your health. Perhaps it’s a sign you’re not making enough time for important routines like shopping and creating a healthy meal yourself. Maybe you’ve always had a belief that you’re a bad cook.

            Write a diary

            Write down your thoughts and feelings around this bad habit. Writing things down forces the brain to think harder.[2] This helps you to find the source to your stress or limiting negative beliefs.

            Advertising

            Alternate: Find a replacement

              Find a positive alternative habit

              Once you think you’ve discovered your trigger, try to find a similar but healthy option. This is where I replaced Coke with lemon water; slouching with simply taking a walk and stretching my back every hour; and chilling at home after work with workout exercises that I actually found fun.

              You could decide to walk to the office instead of driving or getting off the bus earlier to walk. You could switch to a healthier breakfast cereal instead of grabbing a sugary snack when you head out of the door.

              By doing this, you aren’t getting rid of the act altogether like you would if you completely gave something up with nothing to fill that void. This helps your brain accept the improved habit more.

              Create a defence plan

              Everyone has moments of weakness and that want to revert back to the bad habit will rear its ugly head. This is where a plan can help counteract these moments.

              Think of things you can do when the temptations come. For example, if you want to check your phone less, ask your friend or partner to keep it for you or switch it off and read a book. If you’re a starter for an exercise routine, like me, get someone to do it with you to keep you accountable.

              Decide on something you will do once you feel triggered to go back to your old habit. Repeating these positive alternative habits consistently will help wire your brain to see them as your normal new habit over time.

              Delete: Remove temptations

                Remove stuff that reminds you of the bad habit

                Getting rid of anything that reminds you of your bad habit is essential. For example, I got rid of coke in my office and at home and replaced my usual office chair with an exercise ball. It makes it much easier to stop slipping back in a weak moment.

                Advertising

                Avoid all kinds of temptations

                In the same vein, avoid places or people that you know will tempt you back into that bad habit. Don’t go to the supermarket on an empty stomach to avoid the temptation to buy trashy snacks, don’t drive past that fast food joint but find an alternative route instead, say no more often to the friend you know will get you drunk again this weekend.

                It’s all about not putting yourself in the situation where you’re in danger of relapsing.

                Conclusion

                The Control Alternate Delete Method uses the right steps you need to overcome your need to indulge in your bad habits. Working with your core psychology, emotions and feelings behind your actions is what makes this method effective and easy to apply to all bad habits you have.

                Bad habits are easy to form and making changes can seem difficult but remember that it’s all about consistency and repetition.

                Start using the Control Alternate Delete Method today and you can stop a bad habit permanently.

                What bad habit do you want to put a stop to once and for all? You must set aside time and pick one bad habit to focus on. Start using the steps to increase and maintain more positivity in your life moving forward.

                More Resources About Changing Habits

                Featured photo credit: Picjumbo via picjumbo.com

                Reference

                Read Next