Recently I read this article about why Warren Buffett succeeded in what he does best – investing in the best of companies. The factors which were listed in that article can be used to predict the level of success (assuming the absence of extraneous factors such as luck, chance opportunities etc.) which an individual can get in any field.
From that list, I filtered out four rules which are needed to succeed in any new venture which you have started out or are planning to. Below are these four rules and a brief description of each.
1) Ability – The first rule of success states that you need to have the ability or an aptitude for that thing. For example, being able to analyze financial statements and accounts of a company requires you to have a knowledge of the various ratios and parameters which make a good investment good. Or, if you’re planning to be an entrepreneur, you should have the aptitude of networking and being able to be calm in the face of uncertainty, for years, if need be. The ability or the aptitude for a certain thing is the foundation on which future results can be built. A person who faints at the mere site of blood cannot hope to become a cardiac surgeon.
Buffett has mentioned the importance of thissin his famous “circle of competence” quote. Both Buffett and Munger stick to their circle of competence while selecting their areas of investing. An individual should likewise analyze the areas he or she is good at and stick to those.
2) Interest – Being passionate about the subject is another criteria for defining success in any area. Unless you put your heart and soul into any task, it is ridiculous to expect a comparable amount of output from it. Doing things half-heartedly will not only result in a lot of leakage of effort, but also will result in you fizzling out before too long.
3) Willingness to Learn – As you gain expertise in a subject, it may be very tempting to feel a sense of perfection creeping into your mind. Aiming for perfection is good, but it is also prudent to keep a learning attitude, no matter how long you have spent in a particular field. Be it a simple task such as changing a light bulb, or a multi-layered complex project like building a bridge, there always could be a better, more efficient way of doing it. It is being open to criticism, learning from own and others’ mistakes, and generally keeping your antennae in an open frequency to absorb better ideas which keep floating in from the people you meet.
4) Belief – I would like to define this fourth rule as broadly as possible. This is because different people have different methods of following this. Some people call it faith, or hope. Some call it self-esteem or confidence. Some may even refer to this as patience and persistence. And I would go far to say that this is also where the ‘luck factor’ comes into play. Assuming you have jumped into a new venture, and have rigorously followed the first three rules. But thanks to the way the world generally is, and particularly to Murphy’s Law, things may not work out the way you want, or at the pace that you desire. This is when the fourth rule, Belief, becomes important. This is when you would need to ‘pray’ for all the luck you desire. This is when you sit back and say to yourself, that “I believe in myself and in this venture”. This is when you batten down the hatches. Belief is what will get you through the thunderstorm. And when the skies clear, you can go back to starting to follow the first rules again.
Starting out a new venture can be a very difficult and stressful task. You may come out winning on the other side or be battered and bruised beyond recognition. But you can be sure that the experience will change you for the better. The knowledge and the experience that you gain from it will no doubt help you immensely in the future – either while growing your current venture, or while starting out in your next. Following these four rules will ensure that it is more often the former.