Entrepreneurial Mindset – Your Success Path

Do you have an entrepreneurial mindset or an employee mindset? There is a big difference between them.

If you want to build a massively successful business you’ll need to make sure you’re applying the right mental models to help you succeed.

Lets start with a famous quote to set the starting point of what a great entrepreneurial mindset is.

“Business is an intellectual sport”

– Keith J. Cunningham

Yes, business requires skills like hard work, tenacity, commitment, consistency, and other action oriented values.

But, at it’s core all great entrepreneurial execution initially starts with your thinking.

Or to put it in another way, It starts with an idea. Just a simple creative idea.

But, how do we build wealth with an idea? Read on…

The 1st Phase Of An Entrepreneurial Mindset

1 of the first traits of an entrepreneurial mindset is to first observe the problems in the world.

Now, what most people do when they see a problem in the world is they say,

“Gee, the government, an institution, a business, or somebody else should do something about this.”

They have a mindset of other people should solve the problems that exist in society.

But, an entrepreneur understands that individuals can and should solve problems. In fact, an entrepreneur has a powerful role in society.

They can help society immensely by solving problems and get paid handsomely to do so!

The True Role Of An Entrepreneur

And so ultimately an entrepreneur’s job is to solve problems.

An entrepreneur creates a solution to that problem that allows people to solve that problem in an affordable way.

So, before we move on to the the next important entrepreneurial mindset, just focus on this.

“An entrepreneur’s job is to solve problems.”

The 2nd Phase Of Entrepreneurial Mindset

Another thing that an entrepreneur needs to have is a clear understanding of risk and reward.

In fact, it’s the constant manipulation of both areas of risk and reward that allow an entrepreneur to build incredible wealth.

Lets look at a few examples:

1. Low Risk & Low Reward:

This is where most people spend their financial and career lives. They play the safe route. They get a “secure” day job. And they invest in secure assets that usually return somewhere between 2-8% per year.

Wealth can be accumulated this way if you’re disciplined. But, it takes a long period of time.

There are several factors that inhibit wealth accumulation with this model. Some of those things are:

• Higher tax rates on w-2 wage earners.
• Your employer limits the amount you can make.
•  Returns in the 2-8% per year area. ( Those return are ok. But, you can get much higher returns inside a well run private business.)

Entrepreneurial Mindset & Wealth Vs A Day Job Mindset

Now, I’m not saying get a day job is a horrible thing. Nor am I saying that an investment that returns 2-8% is horrible either.

But, what if your goal is to build massive wealth?

Well, it’s going to be harder with a day job and lower returning investment vehicles. 

Now, I’m not saying this to be a hater. It’s simply just math.

The vast majority of multimillionaires and billionaire’s built their wealth through private businesses, real estate, and private equity deals.

How Speed Reflects An Entrepreneurial Mindset

Yes, there a millionaires who went the day job route and bought more conservative public market investments.

But, it takes the average 401k millionaire 40+ years to become a millionaire.

Whereas, through private business and entrepreneurship it can come dramatically faster than that.

Beginning with this understanding of wealth creation is a monumental shift in your entrepreneurial mindset.

Most great entrepreneurs don’t operate in the low risk/low reward space. They operate in the next space…

2. Low Risk & High Reward

This is the ultimate place an entrepreneur wants to operate. It’s the best of both worlds.

In this scenario you don’t have to put up a lot of capital and/or time. And the opportunity for a payoff is disproportionally huge compared to the amount of money/time you have to put in.

A smart entrepreneur can find these opportunities if they keep their eyes and ears to the ground.

Having refined entrepreneurial skills and also being well connected when it comes to deal flow and opportunities helps a lot here.

1 example of this is getting equity in a company in exchange for consulting and strategy.

3. High Risk & Low Reward

Many people are aware of the old saying, “No risk no reward.” And though the saying is generally accurate, it fails in clarifying one big thing.

It doesn’t mean that every risk you take is worth the amount of reward you receive.

For example, lets say your net worth is $1,000,000. And lets say you decide to put that whole $1,000,000 into an investment.

You’ve done your due diligence and you feel like there a 10% chance of the investment working. And you also estimate it will make you $5,000,000 if it does.

Now, most people would say, “Shoooooot! I get to make $5,000,000. I’ll be a multimillionaire. Wow, I’ll be rich etc. etc.”

But, they fail to look at the risk/reward spectrum in here. And in this case you’re taking on exorbitantly more risk than you need to to get too small of a payout.

Not only are you putting all your capital up (high risk) but you’re not getting paid enough for the risk.

To just break even on the deal you’d need to get paid $10,000,000.

And to put it even simpler than that, if you’re going to take on that kind of risk it needs to pay a whole heck of a lot more than $10,000,000.

High Risk & High Reward

The high risk & high reward space is a fascinating realm. Although many people don’t feel comfortable here, it can have massive payoffs.

Let me give you an example of how this works using our $1,000,000 dollar life savings above.

So, in this example you still invest your $1,000,000. And you still estimate the investment will pay off only 10% of the time.

But, in this example you’ve done your due diligence and you estimate that when the investment pays off will return $200,000,000.

From a purely mathematical standpoint, this is a great return and provides great risk/reward odds based off your investment. It’s expected value (EV) is highly positive.

In other words. The reward is very high!

But, from a risk perspective, you’re putting up your entire life savings. That’s a very risk move (especially if it will take you a long time to acquire more capital to invest in.)

Personally, I don’t like to operate in the high risk/ high reward space. But, there have been many successful business and investments built off this model.

How To Make Sure You Don’t Bet On The Wrong Horse

The big picture takeaway, is that and entrepreneur must always be aware of the risk/reward ratio on a macro level.

This is also true on micro levels as well when it comes to things like time management, hiring, decision making, strategy etc. etc.

Now, that we’ve talked about 2 entrepreneurial mindset shifts you need to have. I want to continue to help you by giving you a big list of additional videos and articles to explore.

Master List Of Entrepreneurial Mindset Videos & Articles

There’s a lot to learn when it comes to a successful entrepreneurial mindset. Unfortunately, the school system doesn’t train the average person to think like this.

There’s a reason why most people are either employees or not wealthy.  You have to begin to think differently.

To help you begin to make that shift, I’ll be listing our best entrepreneurial mindset videos, articles, and resources to help you starting thinking with an entrepreneurial mindset. We update them often so also check back regularly.

For more resources you can also subsribe to our Strategy Samurai youtube channel.