You may or may not be good at playing chess, but to succeed as an entrepreneur you must cultivate the skill of looking one move ahead.
Notice I didn't say you need to see 10 moves -- or even three moves -- ahead. That would be nice, but we all know business has more variables than chess, and the rule book changes on us constantly.
Looking ahead is a critical skill to learn because if you anticipate your marketplace -- even just a little -- the rewards can be spectacular. My company became highly successful buying defaulted loans from the FDIC. Just as my competitors seemed to ramp up their bidding activity against me, I sensed I could not ride that horse much longer. I shifted our focus to buying debt from the Resolution Trust Corp.
By the time my competitors hit their stride in that new arena, I was pulling out and focusing on defaulted credit card debt. By looking one move ahead, I eventually controlled 51 percent of all defaulted credit card debt in America.
You don't have to be psychic to look one move ahead. Just follow these five guidelines:
- Create distance from your business in order to gain perspective.
Pull yourself back so you're working on your business -- not in it. Some entrepreneurs find that the off-site or strategic-planning meeting works. Others have never found that helpful. Instead, they do their best thinking while in the shower or on the tennis court. Whatever works for you is fine, but you must find some regular venue that allows you to ask the bigger questions. That leads me to the next point:
- Think about vectors.
You might remember from school that a vector is a force plus a direction. Think about what outside forces are acting on your business, and from what source. For instance, right now there is legislation on the table that could fundamentally change my industry. It would be easy for me to dismiss it and think they never get anything done in Washington. But that's probably what my competitors are thinking. I want to have a plan ready on the off chance this legislation passes. I might even want to influence it before it passes.
- Act before you're totally ready.
You need to be only slightly ahead of your time -- you should expect to be slightly out of your comfort zone regularly. Get used to the feeling of acting on incomplete data. I don't mean you should always fly by the seat of your pants. I do recommend that you try to make business decisions based on facts whenever possible. Just make sure you're more biased toward speed than you are toward complete data.
- Don't assume you know what your customers want and need.
Instead, watch them regularly. Actions speak louder than words, so watching your customers' behavior closely is more telling than what they tell you. If you see a spike or dip in sales or traffic, what does that mean? What other areas are gaining or losing? Do you have enough data points to create a trend line? You cannot have too many data insights into your customers' needs and actions.
- Don't expect social validation and comfort.
In fact, expect quite the opposite. When you're operating ahead of the curve, you are violating conventional wisdom. You're out of sync with what most people do or think is normal. Your competitors are likely to laugh at you or ridicule you. Mine did -- questioning my plan to get a loan to do something that had never been done before. But I pulled it off.
Race car drivers know that the fastest path through a tight turn is to begin the turn just a moment earlier than most people would think proper. Those fractional advantages make all the difference both on the race track and on your income statement.