I’ve been following Rand Fishkin’s career for years. He has one of the best rags-to-not-quite-riches-yet stories I’ve heard.
Rand is a college dropout who spent his early 20s spiraling into a deep debt hole. His problems began when he tried to grow a marketing company but funded it in the worst way possible. He leased office space, rented booths at conferences, hired expensive contractors — and paid for everything with a personal credit card. Yikes.
His credit card debt ballooned to $150,000. He couldn’t make the minimum payments, so he defaulted. The late fees and penalty interest rates caused his debt to swell to more than $500,000.
Anyone else might have declared bankruptcy, but Rand stayed the course. He doubled down at work. He decided to specialize in a marketing niche, search engine optimization, which set him apart from the pack.
He brought new clients into his business. He developed internal tools to use for his clients, then started selling subscription-based access to this software.
Dollar by dollar, he pulled himself out of debt. His company grew into an eight-figure business.
A few weeks ago, I interviewed Rand on my podcast about the lessons he learned from his early mistakes. Here are five takeaways from that conversation.
#1: You’re Going to Screw Up …
… and that’s okay. We’re all muddling through.
As Rand said:
“I think a lot of the … successful folks I know, they muddle through a lot more than you think. And I think that’s actually a wonderful thing. I think it makes the journey feel less inaccessible. It feels like, ‘oh wait, no, this is a possible thing. This is happening to other people. I can muddle through, too.’
“Everyone else made mistakes. Everyone else messed this up. Everyone else had these really tough times and hard struggles, so I am not alone when I go through that.
“I think that’s actually been a big, big lesson for me, is learning how not alone I am when I screw things up in really bad ways.”
The fact is, we’re all failing forward. We’re all trainwrecks. And the success we see someone else demonstrate is the result of many, many failures along the way.
Furthermore, even if a person got lucky the first time, they still made hundreds of minor errors along the way. These mini-mistakes created a gap between their current reality and their fullest potential.
No matter what we’ve accomplished, most of us recognize the gap between who we are and who we could be.
Because we see this gap, we often feel inadequate. We feel self-doubt. We feel frustration. Regardless of what we’ve accomplished, we might feel disappointed.
In the 1990s, researchers from Cornell and the University of Toledo surveyed a group of Olympic medalists to find out if they felt satisfied with their accomplishments.
What they discovered seemed counterintuitive.
The researchers found that Olympic silver medalists are less happy with their achievements than Olympic bronze medalists.
But why? On the surface, this doesn’t make sense. Winning a silver is objectively better than winning a bronze. Why are bronze medalists happier?
The researchers found that the silver medalists were unhappy that they didn’t win gold, whereas the bronze medalists were happy that they got a medal at all.
Happiness is reality exceeding expectations.
#2: You Don’t Have to Build a Giant Startup to be Financially Successful
You can start a lean, self-funded business — and become more personally financially successful than Silicon Valley headliners.
“My biggest concern, and the biggest reason I wrote the book, was I worried about how pervasive the Silicon Valley startup mindset was becoming in business overall.
“I think that it’s impacted how entrepreneurs in hundreds of sectors that have nothing to do with tech think about building a business — and what gets amplified in the press, and what popular culture covers, and how entrepreneurs and small business owners think about what they’re up to all the time.
“So the biggest thing I wanted folks to do was to challenge some of that thinking, to ask if those are the right things for them.”
There’s an assumption that if you’re the Founder and CEO of a venture-backed startup, you’re successful. That if you’re not playing in the big leagues, you’re a chump. You’re hustling for pocket change.
That’s the mythology. And it’s wrong.
You can start a small, hyper-profitable company, without the complication of loans or outside investors or backers. You can grow this micro-business into a high-seven-figure or eight-figure enterprise.
Let’s say you create a company that grosses $50,000 in its first year, then doubles its revenue each year for the following three years ($100k in Year Two, $200k in Year Three and $400k in Year Four). After that, it plateaus.
You’re the 100% owner, and the company has no debt. You spend 25% of revenue on operations, 25% on growth reinvestments, and you collect 50% as net profit and owner distributions.
By the fourth year, in this scenario, you’ll be pocketing a solid $200k. That’s decent income by any standard.
A self-funded lifestyle business is not necessarily a “step down” from the media-lauded coastal companies, nor is it a polite euphemism for a hobby business. It’s a serious enterprise with big payoff potential.
And that’s great news for anyone who’s interested in bootstrapped entrepreneurship without B.S.
#3: Re-Assess Your Skills
Don’t assume you’ve maintained your talents and skills.
“It’s consistently your job to revisit that and to [say], ‘Hey, I once was great at marketing. Now, four years later, it looks like, because I’ve taken my eye off of that, or because the field has advanced or whatever that is … it’s becoming a weakness that I need to reinvest in, or that we as a company need to reinvest in.’”
Rand mentioned that if you were once great at marketing, that doesn’t mean you still are. Business success comes from re-assessing your strengths on a regular basis.
This also applies to your financial life.
If you were once awesome at saving money, that doesn’t mean you still are. Perhaps you developed a self-identity a frugal person. But are you still? Or has lifestyle creep infiltrated?
Similarly, if you were once great at investing, are you still?
You used to be a great driver. But are you still? Or have your reflexes weakened?
You may have been an amazing singer, dancer or cook. But are you still?
You used to be a great friend. Are you still?
People are dynamic, and skills can atrophy. But our concept of ourselves doesn’t necessarily keep pace with reality. We don’t like thinking of ourselves as getting worse.
Check in with yourself to make sure your sense of self-identity is aligned with your behaviors, and that the skills you once had haven’t withered as a result of resting on your laurels.
If they have, that’s okay. That’s why self-awareness exists. You’re aware of the situation, so you can make the decisions necessary to bring these skills back.
#4: Be Careful Who You Listen To
“It is helpful, and I think wise, for relationships to not keep score. So you and your romantic partner, you and your business partner, you and your employee, you don’t keep score about who was right and who was wrong and how many times, and therefore, ‘[I] should not listen to you anymore, and [I] should only listen to me.’ That kind of thing.
“And I totally get that instinct, but it’s also helpful to have some sense of it so that you can weigh feedback and weigh the opinions of other folks.”
Not everyone is insightful about everything. There may be some people in your life who have a great deal of emotional intelligence but lack business acumen, or vice versa.
Pay attention to those around you and — in a rational, objective way — keep track of the wisdom and soundness of their advice. Don’t do this for the sake of being angry or upset. Do this for the sake of evaluating their ideas.
Choose your teachers carefully.
#5: Don’t Follow in the Footsteps of People You Admire
This sounds counterintuitive, but give it some thought.
Instead of trying to follow in the footsteps of people on magazine covers, ask yourself, “Is their path right for me?”
“I think, in fact, [I had] a feeling of not being worthy and not being good enough — a feeling that to be taken seriously as an entrepreneur, to be respected, to earn the attention and praise that I wanted, we had to grow big. We had to be like the big kids in Silicon Valley and raise a bunch of money, and build a big team, and have a lot of revenue.
And whether we made money was not the focus of that. And whether we were happy was not the focus of that. And whether we were bringing something wonderful to the world was not the focus of that. The goal was a high growth rate, and a lot of revenue, and people. Because those were the things that I thought were impressive.”
There’s a difference between what your ego wants and what your soul wants. Stay quiet enough that you can hear the difference.
You can read Rand’s book, Lost and Founder, to learn more about his entrepreneurial insights.
If you want to start your own online business, check out our free tutorial on how to set up a website in 5 minutes.