Miscellaneous Essays

Criticism is the Price of Success

No Comments

One of the most surprising and disappointing things about reaching an important goal is that many people won’t share your happiness when they hear about it. Some will even criticize your achievement.

This has happened to me a lot in my success-driven life. The criticism always hurts – but it hurts less now than it did when I was younger. Moreover, I’ve learned to profit from it. You can too.

What’s important, I’ve found, is not the criticism itself but how I react to it. Praise motivates me to do more of what I’m doing. Criticism – which used to make me want to quit – spurs me to examine what I’m doing and see if I can do it better.

This happened just recently after I published an article in my Ready, Fire, Aim newsletter about the economy. Two of my most esteemed colleagues read it, didn’t like it, and chastised me for bad writing. That set me aback. I consider myself to be a pretty good writer, but they made me wonder if I was really just a shallow-minded pundit of mediocrity.

After doubting myself for a few days, I set to the task of profiting from their comments. I reread what they said and made notes on those points I thought were valid. I circulated my notes to Jason, Suzanne, and Judith, my editors. That began an ongoing discussion about how we could improve Ready, Fire, Aim. And we came up with a few good ideas.

I then wrote to my two friends who were nice enough to honestly critique my article. I thanked them for helping me make the newsletter better. And I meant it.

In What Got You Here Won’t Get You There: How Successful People Become Even More Successful, Marshall Goldsmith talks about how important feedback is to success:

Feedback is very useful for telling us “where we are.” Without feedback… we couldn’t have results. We couldn’t keep score. We wouldn’t know if we were getting better or worse. Just as salespeople need feedback on what’s selling and leaders need feedback on how they are perceived by their subordinates, we all need feedback to see where we are, where we need to go, and to measure our progress.

Goldsmith acknowledges that negative feedback “can be employed by others to reinforce our feelings of failure, or at least remind us of them – and our reaction is rarely positive.” Worst of all, negative feedback can sometimes shut us down. “We close ranks, turn into our shell, and shut the world out.”

When Goldsmith was a child, his mother told him he had no mechanical skills. He went through high school believing that, and, when he was 18, scored at the bottom of the entire nation in a test given by the U.S. Army.

A few years later, a professor persuaded him to take another look at his mechanical abilities. That’s when he realized his mother was wrong, and he was “just living out the expectations [he] had chosen to believe.”

So that might be the first thing to say about profiting from criticism. Recognize that a negative comment about you or your abilities cannot damage you unless you let it.

Goldsmith says that he wasted years, convinced that he was mechanically inept. But he didn’t blame his mother. He blamed himself. “I was the one who kept telling myself, ‘You can’t do this!’ I realized that as long as I kept saying that, it was going to be true.”

Here are some useful techniques for profiting from criticism.

1. Remember that criticism is the price of success.

As writer Elbert Hubbard said, “Criticism is something we can avoid easily by saying nothing, doing nothing, and being nothing.” So if you do something, you’re going to be subject to criticism. President Obama gets criticized. Clint Eastwood gets criticized. Even Mother Theresa was criticized. The more success you have, the more criticism you will engender. Some of it will be helpful. Most of it will be useless. But don’t be afraid of it. It won’t kill you. It will only make you stronger.

2. Dump your failure-support group.

This group includes jealous friends, professional enemies, and habitual critics. These people get their kicks from kicking you when you are up. They want you to be down where they are. Don’t go there. Just ignore them.

3. If you can’t ignore your critics, frame your responses strategically.

Sometimes, you won’t be able to ignore your critics – if, for example the criticism is coming from your boss or your family. That’s when you need to stay calm and respond strategically.

In Self-Esteem, Matthew McKay and Patrick Fanning recommend a technique they call “clouding.” “Clouding involves a token agreement with a critic. It is used when criticism is neither constructive nor accurate. When you use clouding to deal with criticism, you are saying to the critic, ‘Yes, some of what is on your screen is on my screen.’ But to yourself you add, ‘And some isn’t.’ You ‘cloud’ by agreeing in part, probability, or principle.”

Agreeing in part – finding one part of your critic’s comments to agree with or acknowledge.

The Criticism: You’re not reliable. You forget to pick up the kids, you let the bills pile up until we could lose the roof over our heads, and I can’t ever count on you to be there when I need you.

Your Response: You’re certainly right that I did forget to pick up the kids last week after their swimming lesson.

Agreeing in probability – acknowledging that there’s a possibility your critic could be right. The chances may be a million to one against it, but you can truthfully say, “It’s possible you’re right.”

The Criticism: Starting a business now is a terrible idea. The economy is in the crapper, and you’re just wasting time and money.

Your Response: Yes, it’s possible that my business won’t work out.

Agreeing in principle – acknowledging the logic of your critic’s argument, but not necessarily agreeing with his assumptions. This clouding technique uses the conditional “if/then” format.

The Criticism: You’re really taking a chance by claiming all these deductions you don’t have receipts for. The IRS is cracking down. You’re just asking for an audit. It’s stupid to try to save a few bucks and bring them down on you like a pack of bloodhounds.

Your Response: You’re right. If I take the deductions, I’ll be attracting more attention to myself. And if I get audited, it will be a real hassle.

4. Take helpful criticism seriously.

Helpful criticism is sometimes harsh but it’s always well intended. It’s not hard to identify it. The hard thing is to accept that it is helpful and use it to improve yourself.

In Succeed for Yourself: Unlock Your Potential for Success and Happiness, Richard Denny says, “Constructive criticism is not negative, so be enthusiastic about it. Remember, you are very fortunate if you receive it. Encourage others to offer constructive criticism.”

5. Thank your critics.

I make it a habit to send a personal “thank you” to anyone whose criticism has helped me do better work.

6. Solicit criticism – from people you respect – while there is plenty of time to make changes.

One of the most successful publishers I know does this regularly. When considering the launch of a new product, he sends a memo to a small group of more experienced publishers explaining his concept and asking them to poke holes in it.

By getting their criticism early, he doesn’t feel its sting. After all, it’s not his baby that is being criticized. It’s just an idea. And ideas, as we all know, are not worth anything until they are put into action.

Another benefit – and this is a big one – is that it saves him time and frustration. By getting input on an idea before he’s done a lot of work on it, it is much easier for him to make changes.

Continue Reading

Notes From My Journal

Literary Criticism

No Comments

criticsFor every good book, play, or poem, there are probably a half dozen works of criticism written about it.

Literary critics tend to fall into groups, characterized by what they think their jobs are. The best criticism is that which seeks to understand and explain a work by analyzing it in its cultural context.

But many critics are not happy doing that. So they do other things, such as evaluating literature based on how well it lives up to some moral or political standard. These efforts usually aren’t helpful at all – unless you are a zealot – but they are common. Other critics,wishing to show how smart they are, take a “formalist” approach, analyzing works according to their “linguistic texture.” Then there are critics who analyze works psychologically. This can be fun if you like it, but… well. There are also critics who like to find comparisons between a work and the author’s life. Most of them work for arcane literary journals. And then there are those who think their duty is to explain nothing more than their own personal impressions.

Interesting Fact: The word “criticism” is from the Greek kritikos, meaning “judge.”

Continue Reading

Miscellaneous Essays

The Best Way to Get Funding For Your Business

No Comments

Last week, I suggested that it takes more than an idea – even if it’s a really fantastic idea – to attract potential investors. You need to prove that your idea has legs by turning it into a working model.

But then what? Once you’ve got a working model, where do you go for the money you need to turn it into a business?

In general, there are four sources of capital: venture capital firms, government agencies, commercial banks, and private investors or partners.

If you think your idea might be of interest to venture capitalists, check out the National Venture Capital Association (nvca.org). But for the average entrepreneur, venture capital isn’t a possibility.

As Paul Lawrence explained in his article “Raising Capital for Small Business Ventures”:

Yes, some venture capital firms will invest in new businesses, but such businesses are usually involved in technology or some other high-growth area. Frankly, for most small businesses, venture capital isn’t even an option. It’s rare for a small-business concept to have the kind of mammoth payoff venture capitalists look for.”

Plus, the cost of doing business with these companies is high. It’s basic economics. Their risk is high, so their reward must also be high. Even if you were to interest a venture capital company in your business, you’d be aghast at what they’d want in terms of their ownership position.

What about government grants? Tim Berry, author of Hurdle: The Book on Business Planning, points out that government funding agencies usually have “social” agendas. Grants and loans are available to minorities – especially minority businesses engaged in education, antidiscrimination projects, community services, fine arts, and other politically popular objectives.You can find out if your business idea might be a candidate for government money by checking into any of the government agencies whose purpose is to stimulate entrepreneurship. The best known is the Small Business Administration.

I wouldn’t advise taking this route, though. It requires too much bending to bureaucracy. Too much artificiality. Too much red tape. Getting these loans and grants takes months (or years) of filling out forms. And there are all sorts of reporting and regulatory requirements – enough to slow down even the most patient person. Plus, government-funded business projects have an extremely high failure rate once the funding is withdrawn. That’s because they begin with an idea, not a working model. And the idea isn’t good to begin with because it is based on social policy instead of being connected to profits – which is, after all, what fuels a business.

As for getting money from a commercial bank, I can make this short: Forget about it. The only way a bank will lend you money these days is if (a) you have excellent credit and (b) you can collateralize your loan with assets. If you have good credit and tons of money, you don’t need a bank loan. You can loan yourself the money.

This brings us to the fourth and final option…

Continue Reading

Miscellaneous Briefs

Government or Business?

No Comments

Just as you can’t trust businesspeople to put their customers first, you can’t trust politicians to put their constituents first.

Neither libertarians nor big-government advocates have a theoretical advantage in the argument over whether it is better for the government or for private businesses to hold power. But if you look at business versus government in terms of their major contributions to American history, you can see a difference.

Arthur Bloom, the award-winning television news director, said this about the government’s efforts to destroy the Bell Telephone Company:

There are two giant entities at work in our country, and they both have an amazing influence on our daily lives…. One has given us radar, sonar, stereo, teletype, the transistor, hearing aids, artificial larynxes, talking movies, and the telephone. The other has given us the Civil War, the Spanish American War, the First World War, the Second World War, the Korean War, the Vietnam War, double-digit inflation, double-digit unemployment, the Great Depression, the gasoline crisis, and the Watergate fiasco. Guess which one is now trying to tell the other one how to run its business?

At the highest level of our economy we see big business working hand-in-hand with the government. That is because the government has always known it was in its best interest to align itself with the bankers and major business players. It is really only the entrepreneurial class that can be trusted to create more wealth for more people, but government rarely gives entrepreneurs more than a passing nod.

Continue Reading

Miscellaneous Essays

The First Step to Getting Funding for Your Business

No Comments

One of the most commonly asked questions I get from would-be entrepreneurs is: “How do I get money for my business idea?”

I’ve answered it before, but it’s worth answering again because the question keeps coming up. Let’s start with a bit of harsh truth: It isn’t easy.

You may have heard the expression that if you build a better mousetrap the world will beat a path to your door. That implies that there is always lots of money looking around for good ideas.

On the contrary, money rarely chases after ideas. Most of the time, money chases money.

Take the business I am in: information publishing. Not a week goes by when I don’t hear a proposition from someone who has a “brilliant” idea for a publication. It might be a new investment newsletter or a magazine about retirement or a website on health and fitness. “I can’t tell you what the idea is,” they usually say, “but when you hear it you will realize how special it is and you’ll be happy to fund it.”

Sometimes people want me to sign non-disclosure agreements. Apparently they fear that I will “steal their idea” and not pay them for it.

In my 25+ years of listening to publishing ideas, I have signed only two or three such agreements. And they were done years ago, before I really understood what I was doing. Nowadays, I don’t sign them. Not because I want to steal the idea, but because I know there is a 99.9 percent chance that (a) I won’t like it or (b) I will already be working on something similar.

That second situation is quite common. When one person comes up with a clever idea, it’s very likely that other people – often people employed by companies I consult with – have come up with it too.

The reason for these “coincidences” is easy to understand if you’ve read Malcolm Gladwell’s The Tipping Point. Brand-new ideas seldom come to the market sprung from the thigh of Zeus. Usually, they have been percolating around the market’s periphery for years. Gradually, they reform themselves until one particular application of the idea catches fire.

Since the economy began to collapse in the middle of 2008, for example, every smart person in the investment advisory business had been busy thinking about new ways to make money in 2009. These individual thinkers talked to one another and made comments in e-letters and blogs. One specific idea spurred another. And, eventually, there was an outpouring of similar ideas. I saw a half-dozen new products related to income-oriented investment advisories. And another half-dozen for products that focused on short selling.

The people that came up with these ideas were not stealing from one another. They were individually mulling over the same problems. It’s a sort of collective consciousness that results in so many similar ideas, only a handful of which will go on to make money.

And that gets us to the main reason why I don’t sign non-disclosure agreements. Because I know that ideas themselves are not so important. What matters is the way they are articulated.

In How to Get Rich, Felix Dennis puts it like this:

It really does not matter who gives birth to any particular idea. This is borne out by the law relating to patents and inventions. You cannot patent an idea. You can only patent your own method for implementing an idea. …Ray Kroc did not invent the idea of fast food. …There were thousands of ‘fast food’ outlets in the USA at the time. …His genius was merely to recognize this fact and implement a simple five-point plan: Standardize the food and prices, franchise the outlets, produce the food swiftly in clean surroundings, offer value for money, and market the whole shebang relentlessly.

Yes, you need more than an idea to attract money. You need some unique selling proposition and, if possible, proof that the idea will work. You can have both things if – before looking for money – you build yourself a working model.

Let’s look at a few examples that define the difference between an idea and a working model.

Idea: a newsletter on short selling

Working Model: an e-letter that has been published for six months and has 100 paid subscribers

Idea: a retail jewelry store

Working Model: an operating business that has sold jewelry at flea markets profitably for a year

Idea: a musical comedy about Enron

Working Model: a script that has been performed to rave reviews at local theaters

The difference between an idea and a working model is significant – especially to a potential investor. The difference is two-fold:

  • Ideas tend to be generalized, whereas working models are specific.
  • Ideas are unproven, but working models show the potential for profits.

So that is the first and most important thing to do once you’ve come up with a “great” business idea. Turn it into a working model.

You don’t need to spend much money doing that if you are clever. By taking advantage of the Internet and using direct-marketing techniques, almost any business can be tested without a huge investment.

Almost any. Not every. You can’t create an inexpensive working model of a three-wheeled car, for example. Nor can you test out a new kind of luxury hotel idea on the cheap. But capital-intensive business ideas like those are best left to the larger businesses that occupy already dominant industries. For ordinary entrepreneurs, the good ideas are those that can be modeled cheaply.

Once you have a working model, you have a much better chance of getting the money you want. But where do you look?

Continue Reading

Miscellaneous Briefs

Discrimination

No Comments

Two things that are considered to be intellectual faults are actually great and useful intellectual tools. I’m talking about the capacity to make generalizations and to discriminate.

You make a statement and people say, “That’s a generalization.” And you think, “Of course it is. I’m trying to make a generalization. That’s what smart people do.”

Or you feel that a certain type of person dressed in a certain way is dangerous. And you are told to ignore that feeling because it is “discriminatory.”

That is ludicrous. We discriminate naturally. It is the part of our limbic brain system that helps us make quick and necessary decisions. We generalize because we want to understand our experiences and our instincts. Being able to do this is a function of our neocortical brain.

These are the highest powers of both our rational and also our emotional intelligence.

Discrimination based on generalized assumptions can indeed be harmful. When, for example, the merits of individual people are inhibited by the discriminatory practices of groups that have power.

But it is perfectly rational to make generalizations and discriminations based on observation, so long as you allow for the exceptions and do not impose restrictions upon classes of people that you believe, in general, to have certain undesirable traits.

Continue Reading

Miscellaneous Essays

How Much Are You Worth?

No Comments

A French woman, upon seeing Picasso in a Parisian restaurant, approached the great master and insisted that he put down his coffee and make a quick sketch of her. Graciously, Picasso obliged. When he was done, she took the drawing, put it in her handbag, and then pulled out her billfold.

“How much do I owe you?” she asked.

“$5,000,” was Picasso’s reply.

“$5,000? But it took you only three minutes!” she exclaimed.

“No,” Picasso answered. “It took me all my life.”

That’s how I feel about the work I do. My skills – as a marketer and small-business builder – are very valuable. If you want me to help you sell your products or grow your business, you can expect to pay me at least $2,000 an hour.

And that’s only if I have the time… the work time… left in my schedule. If you want me to work during my personal time – evenings or weekends or during my vacation – how much would it cost you? You don’t want to ask.

A wealthy businessman, who had been following my writing at ETR for years, had been trying to persuade me to help him grow his business. At one point he offered to pay me $50,000 to spend a weekend with him – plus “plenty more” if I agreed to provide ongoing support.

I graciously turned down his offer, and he had a hard time understanding why. “I’m offering to pay you $3,000 an hour,” he said.

That’s true. For 16 hours (two days’ work), $50,000 amounts to just a bit more than $3,000 an hour. But I didn’t want to do it, because he was asking me to give up my personal time – the time I spend with my family and friends and the time I spend on my hobbies. And that time is worth at least twice as much as my working time.

How to Calculate Your Hourly Worth

Now, let’s talk about you. Let’s talk about how to calculate what your time is worth.

Here’s the formula I use: Take the amount of money you earn per year. Then divide that by 50 weeks and then by 40 hours.

For example, my friend Walt has a growing real estate business. To convince him that he shouldn’t be doing so much of the grunt work himself, I helped him apply my formula to his situation.

Walt makes about $150,000 a year. $150,000 divided by 50 weeks equals $3,000 (his weekly income). $3,000 divided by 40 hours comes to $75.

“That’s how much your work time is worth,” I told him. “So never do anything yourself that you can have done for less than $75 a hour.”

Now you do it. Divide your yearly income by 50 weeks. Then divide that by 40 hours.

If the number you come up with is less than $50, it tells me you are not practicing a financially valuable skill – one that contributes to your company’s bottom line. That means being involved in product creation, marketing, sales, or profit management. If that’s the case, go back and reread past ETR messages on how to get yourself into one of those jobs… because that’s where the big salaries are.

At the same time, make yourself as valuable as you can be at your present job. And start focusing on the really important work that will propel your career – and your income – forward.

Before long, your hourly rate will be double or even triple what it is today.

And your personal time will be worth even more.

It might be three times as valuable as the time you spend at work… five times as valuable… or 10 times as valuable. Only you will know just how much it’s worth to you. But at the very least, your personal time should be worth double what your work time is.

Once you know what that number is, you can make sure that every personal task you engage in is “worth” that amount of money to you.

Let’s say, for example, that, by applying my formula, you have calculated your work time to be worth $25 per hour. And you figure your personal time is worth twice that: $50 per hour. Let’s also say that you spend three hours every weekend in the summer doing yard work (mowing the lawn, trimming hedges, fertilizing, and so on). Ask yourself if you think it’s worth $150 ($50 times 3 hours of your personal time). If you feel it is, keep doing it. If it’s not, hire someone else to do it – which you can certainly do for a lot less than $150 a week – and free up your time for activities you really enjoy.

Same goes for any household job that you can hire out – cleaning, painting, washing the car.

We all have the same number of hours in the day. How much you get paid for the hours you work – and how much pleasure you get from the hours you don’t – are both up to you.

Continue Reading