I spoke with an entrepreneur out of Detroit named Ray recently. Ray owns an Allstate agency. He drives a brand new Escalade that is a fleet vehicle from a side hustle transportation company he started. He’s in the process of buying a large building for his agency. Most of the space he’s going to lease to other businesses. And he’s planning on having his company build him a house to live in which he’ll rent from the company.
All of this is bank funded. Ray exhorted me to take out a loan and buy something. “It’s free money! Whatever you’ve been dreaming of doing you can do it! Start a transportation company and buy that $100,000 Lamborghini you always wanted. Develop some assets.”
In my imagination, I was watching the bank take Ray’s home because his business had run up against some loss he hadn’t foreseen.
How affected by fear do you think you are?
How does fear impact your business decisions?
For myself, I’ve almost never felt scared or anxious in business, but fear has had a larger impact on my choices than any other factor. Bigger than luck, bigger than the market, bigger than the limits of my skill or knowledge.
Another Kind of Fear
My uncle Bob took me for a ride in his plane when I was fresh out of the Marines. We flew up over the Virginia countryside higher and higher into the powder blue sky until the farmland below transformed into a chessboard of greens and tans. We circled around for fifteen minutes gazing out the window. Then he pulled the nose of the plane up into a steep climb. After a couple seconds, a buzzer sounded and a red light started to flash on the roof. The engine stalled and then died. The cockpit was suddenly silent. Our momentum slowed to nothing. Then we started to slide backward and fell like a rock.
As we fell, the weight of the engine pulled the nose down.
I glanced over and Uncle Bob was watching me for a reaction and I smiled at him. Disappointed, he worked the controls and after a couple seconds I heard the engine sputter and then start up. We accelerated out of our fall and achieved lift again.
On the car ride back, Uncle Bob admitted, “I wanted to see what my tough guy Marine nephew was made out of.”
I’m not a particularly brave person, but I’ve done lots of things that many would be frightened to do.
I’ve fought in a ring and on the street. I’ve spoken at conferences and events. I’ve fast roped out of helicopters with just a rope and a hundred feet of empty space. I’ve scuba dived deep under freezing water where I couldn’t see further than a foot in front of my face. I’ve hopped trains and hitch hiked. I’ve climbed cliffs and squeezed through caves so tight there wasn’t space to turn around. I’ve hit on random women in bars and everywhere else. I’ve told the truth. I’ve spoken first. I’ve taken responsibility.
I know what fear feels like and I know what anxiety feels like.
When it comes to business decisions I almost never feel either.
As I’ve gained experience though, I’ve realized that many of my decisions are heavily influenced by fear.
An insidious fear that took me years to recognize is the “smart choice.”
At several junctures in my business, I’ve been unhappy with the state of affairs. I’ve set aside time to reflect and plan how to fix things. I identified what I wanted to do, the work that I wanted to be focused on, and then talked myself into doing something else.
It was always smarter to do something I didn’t care about than pursue things I did.
As an example, I run an agency. It’s not a business model I particularly like. It’s well suited for people who love the actual work- coding, designing, marketing. But I like business and the constant evolution of the work is like a treadmill I don’t want to walk on.
However, I made the “smart choice” to invest tens of thousands of dollars and years of effort improving our agency. I’ve received a return on that investment, but it hasn’t taken me where I want to go. At the end of the day I’m still on that treadmill.
I never felt fear or anxiety around smart choices. In the moment, I always believed I was making strategic decisions. I was engaging in short term sacrifice for long term gain. I was eating my vegetables so that I could have dessert later.
As insidious as the smart choice has been my limited ambition.
I have an odd psychology with confidence bordering on arrogance undercut by extremely limited ambition.
I don’t desire riches and I accept the world for what it is. With these values it’s natural to have humble aims.
But I’ve come to realize that not aiming for larger goals is just another symptom of fear.
3 Methods To Recognize Fear
If it’s not something you feel, if fear is more subtle than a racing heartbeat, how do you know when your decisions are being guided by it?
The Voice That Stops You
Ray told me that one of the key things he had learned in business was that you have to think big.
He said he always thought he was thinking big until one of his advisors talked with him about his plans and said, “No Ray, bigger than that.”
He said, “I couldn’t possibly think how my ambitions could be bigger, but my advisor said they could be and they were right.”
He paused and then said, “There’s always this voice though. You come up with something and the voice says you can’t do that ‘because.’ You got to watch for that man- you’re holding yourself back.”
Ray’s right. When you start a sentence talking about what you want and end it with why you can’t pursue it then fear is controlling you.
Here are common phrases that come up for me:
- “I would but”
- “I can’t because”
- “I need to”
- “The smart thing to do is…”
- “I should”
Are You Acting Out of Protection or Possibility?
“Bow down before the one you serve, you’re going to get what you deserve.”
– Head Like a Hole, Nine Inch Nails
There’s a popular personal development model that concerns mental stance. It’s a dichotomy with an individual being either abundance oriented or scarcity oriented.
How do you know if you’re in one camp or the other?
One of my maxims when it comes to marketing and sales is, “Truth is in behavior.” Watch for what people do, not what they say.
If you study your behavior and choices, you can enlighten yourself to how scarcity or abundance oriented you are.
The big question is:
Are you acting to protect something or are you acting out of the possibility of gaining something?
If you’re primarily protecting or conserving you’re letting fear determine your choices.
Small ambitions are a manifestation of this. They sound like, “I’m not asking for much…” But the behavior is, “I’m not risking much.”
The Social Mirror
In psychology, there’s a framework concerning self knowledge called the Johari window. It has four quadrants:
- What you know about yourself and others don’t know about you.
- What you know about yourself and others do know about you.
- What others don’t know about yourself and you don’t know.
- What others know about you and you don’t know.
If you can humble yourself to listen, the last quadrant is an opportunity for growth.
In my conversations over the years with entrepreneur friends, I noticed a pattern where they would hint that I was risk averse or being exceedingly cautious.
This never made much sense to me.
I’ve tried more things than most of my entrepreneur friends, risking money and time on all sorts of marketing tactics and new products.
For example, at one point I was researching repositioning into pharma and spent $10,000 flying to pharma conferences and cold approaching pharma managers I didn’t know. Pharma is an industry with huge stakes and its people are defensive and insular. That research came to nothing- I decided it wasn’t right for us.
When my friends would suggest I was too cautious, I would sometimes retort, “It’s easy to risk when you’ve never lost.”
Most of my experiments and initiatives haven’t worked. And I’ve had some hard knocks in my time in business.
But consider my two responses:
- On one hand disagreeing.
- And on the other hand making excuses.
This is textbook defensiveness.
That means that on some level I agreed with them. I knew that their observations contained at least a kernel of truth.
I went over to my in-laws for Mother’s Day brunch. They had a fire going outside and I joined my two brother-in-laws around it. We talked about Ray and his big bets. Right now interest rates are at historical lows and we discussed acquiring an extra house or vacation home to rent out and what the risks are.
Right towards the end of the conversation, one of them looked up and said, “Well, if you never take the risk, nothing changes. You can’t get any of the benefits without taking a chance.”
More simply, “Nothing risked, nothing gained.”
The Bigger Risk
This speaks to the deeper issue with letting fear guide your decisions.
As human beings, we’re not adept at assessing risk. Fear has served us incredibly well when it comes to survival, when decisions impact living or dying. But few of our decisions in modern life have a consequence of death.
The risk in front of us is typically not the one we should be concerned with.
The bigger risk for us as individuals is that we live a safe life, below our potential and dishonoring the opportunities that fortune has provided.
The bigger risk for us as businesses, is not that we fail, but that our business is mediocre. Safeguarding modest success limits us from creating exceptional value.
Ray’s Allstate agency is excellent in that it’s a $5 – 6,000,000 annual revenue business where most insurance agencies get by under the million dollar mark.
But 7 years ago Ray was bankrupt. And it’s good he was. Bankrupt is a better outcome than getting by. He wouldn’t have found exceptional success if he had been focused on the survival of a merely okay business.
The bigger risk we face is settle for a humble existence when we were born to be titans.