I came across this Times Online article today that I could not resist linking to. It’s actually a book excerpt from How to Get Rich by Felix Dennis, the founder of Dennis Publishing of Maxim magazine fame (among other publications).

Aside from being well-written and entertainingly snobby, the excerpt hits home on some important points. Some key excerpts:

Nobody believed that exercise could prove addictive until science stepped in and discovered endorphins. And making money, I assure you, is a hell of a lot more of a rush than jogging.

Up to just seven years ago I was still working 12 to 16 hours a day making money. With hundreds of millions of dollars in assets I just could not let go. It was pathetic. Because whoever dies with the most toys doesn’t win. Real winners are people who know their limits and respect them.

I firmly believe this is true as otherwise we wouldn’t have nearly as many billionaires. At some point you simply don’t need more money. However it’s only pathetic if you’re making money for money’s sake, rather than enjoying the ride.

If you wish to be rich, however, you must grow a carapace. A mental armour. Not so thick as to blind you to well-constructed criticism and advice, especially from those you trust. Nor so thick as to cut you off from friends and family. But thick enough to shrug off the inevitable sniggering and malicious mockery that will follow your inevitable failures. Not to mention the poorly hidden envy that will accompany your eventual success.

After a lifetime of making money and observing better men and women than me fall by the wayside, I am convinced that fear of failing in the eyes of the world is the single biggest impediment to amassing wealth. Trust me on this. If you shy away for any reason whatever, then the way is blocked. You will never get started. You will never get rich.

Fear of failure is almost certainly the reason that you have not already begun to make yourself rich. It haunts all of us.

This is a constantly reiterated concept by successful business owners everywhere. It’s the fundamental barrier that causes people to come up with all sorts of wonderful excuses for not starting that business they’ve been dreaming of. Dennis goes into this in-depth and strikes important point after point.

It’s not very easy to find a book that is both well-written and full of great advice. Based on the excerpt it’s got potential to be entertaining and insightful in the same was as Branson’s Losing My Virginity. I’ll post my full review once I have my hands on it in a month.

As humans we are naturally highly emotionly driven. Each of us have a fine balance of emotions and logic in our decision making process, with some decisions being largely emotional like buying a fancy piece of technology, and others logical like a careful chess move.

Emotion certainly plays a role in running a business as it well should. Imagine running a company without receiving any of the thrill of closing a big sale, releasing a new product, or snagging a major feature in an important publication. Imagine putting in 12 hours a day along with all your savings if there was no passion to keep your energy burning high through it all.

Unfortunately emotion at the wrong time or insufficiently checked by logical reasoning can be incredibly destructive. It can lead to buying the wrong car at a high price in the heat of the moment. It can result in offering a customer an unprofitable price in desperation to seal the deal. It is the enemy of cool calculating poker players, who are capable of amassing strong winnings over a period of strong play only to lose it all in a few angry moves when luck goes sour. It must be kept in check.

This applies to all points on the business spectrum. You’re goal isn’t to get rid of emotion and become a machine, it’s to recognize it and prevent yourself from making a poor decision because your head is clouded with negative influences such as fear, impatience, desperation and anger. There are a lot of parallels between business and poker, as both are games of risk with the short-term outcome being a complicated mix of luck and skill. Rationally a poker player will live by the long term positive outcome expected from his/her superior play, but emotionally it’s all about the immediate situation where the worst hand catches a lucky draw. An undisciplined player will make future betting decisions on this emotionally devastating but mathematically acceptable outcome, causing more losses that quickly outweigh the original. So much for humans being rational beings.

Enough poker advice. This is just as serious in making business decisions, including the decision to start, continue, or end a venture. At the initial point you may decide to test a new idea for a product or marketing campaign. You do some calculations and conclude that you will need to spend so much money and have so much data before you can conclude whether it works or not. So far so good, you have rationally worked out the conditions of your test and know what to look for. You launch the experiment and it all goes to hell. You may find that your data is telling you that the idea isn’t working, but you are emotionally attached to it and decide to give it a longer chance. You do this instead of the logical response of killing the project or improving it so that it does work. Inevitably you lose more money, money that could have been allocated towards profitable activities. The opposite is equally true - when the first few numbers are discouraging it may be tempting to pull the plug even though you know the results are not large enough to be statistically relevant.

Notice how these emotionally charged reactions have had the opposite effect of their desired results? This happens all the time with business owners. I’ve done it myself and have seen plenty of others do it. Controlling it takes practice in elevating your consciousness to recognize when your decisions are about to be made based on irrational emotions and then being able to stop and re-evaluate whether this is a positive idea or self-destruction.

Small business owners come from various fields with many different skillsets, but in this role they are all tasked with wearing far more hats than it’s reasonable to expect expertise in. Unfortunately the amount of time spent wearing each hat tends to be proportional to the amount of experience a particular business owner has in that area. Thus some small businesses have amazing tech, some have impecceable books, and others have brilliant marketing. Just as true is that some don’t take advantage of technology, some use napkins for bookkeeping, and others were built “expecting walk-in traffic”.

It’s not reasonable to expect to be able to ignore the facets of business that you don’t know much about and hope to compensate with a really great product or strong marketing. A great business succeeds in many areas because the owner(s) have taken the time to learn the additional skills or find great people who have them. It may seem like a daunting learning curve to start picking up accounting and marketing, but this is actually your opportunity to repeatedly increase profits, save time, and eliminate many levels of stress.

I was in high school when I first became interested in owning a business. I knew a lot about computers. I could fix them, build them, and make them do my evil bidding. Unfortunately I knew nothing about running a business so my computer sales & repair venture didn’t go very far. I progressed onto other ventures and after aquiring my fair share of lumps I developed more respect and seriousness for the business side of business. I started reading about marketing, business management, and more marketing. I expanded my horizons gradually to improving my sales skills, networking, and accounting. I can only say that each time I wished I had learned sooner and faster as the techniques I’ve picked-up have doubled and tripled my profits over and over again. Certainly worth the time and the learning materials cost, both of which are trivial compared to the rewards of knowing what you are doing.

As Tilted Pixel’s plans to grow into an office and fulltime staff begin to come to fruition I will now be shifting more time to learning how to be a great boss and revisiting the strategies of How to Bag an Elephant. With every stage in the life of a business there are new and exciting things to be learned and mastered.

When starting your business, regardless of what background you come from, take the time to fill in your skills gaps. One of the advantages of starting a business with somebody rather than hacking it alone is that you can find a partner or team whose skillsets are very different from yours. In fact if you are looking for serious VC funding you are going to have well-balanced management team whose competencies sum up to a great business mind. If this is a solo venture then don’t allow yourself to be intimidated by new areas. I always dreaded learning accounting, but now I can do my bookkeeping on my own and could even survive without accounting software doing the calculations for me. These skillsets can be picked-up in various ways. I’ve learned a lot from university courses, speakers, online resources, and books. They all have their place in the learning process so I wouldn’t recommend limiting yourself to one resource.

Some of the books that I’ve found particularly useful are:

• Bag the Elephant: How to Win and Keep Big Customers
• Getting Everything You Can Out of All You’ve Got
• Getting Things Done
• Selling 2.0