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How Great Entrepreneurs Use Fear To Succeed: Lessons From Billion-Dollar Entrepreneurs

In his first inaugural address at the onset of the Great Depression, President Franklin D. Roosevelt uttered one of the more memorable lines of the English language, the only thing we have to fear is fear itself. The reason this line resonates through the generations is because fear can paralyze us. Many of my students tell me that they stay in their stifling corporate jobs and do not pursue their dream because they fear failure (and the loss of health insurance). Many of the entrepreneurs I have talked to, and worked with, told me that their first step, when they first put their necks on the line, was the most difficult. I interviewed Gustavo Cisneros who is one of eight children of Diego Cisneros. Diego Cisneros built a business empire in Venezuela. When it came time for Diego Cisneros to appoint a successor, he picked Gustavo Cisneros, who amply justified his fathers confidence in him and led the Cisneros Group from one of Venezuelas great companies to one of the worlds great ones. Continuing his family tradition of picking the nextgeneration leader, Cisneros picked his daughter Adriana from among his three children. When I asked Gustavo Cisneros why his father had picked him, and why he picked his daughter, he answered because I am fearless, and she is the same.

Do you have to be fearless or is fear actually a good motivator? Fear of failure can encourage you to evaluate major risks and find ways to reduce them. Fear can encourage entrepreneurs to form alliances and develop strategies to improve the odds of success. Fear can spur us to work harder, learn more, and manage better. Mark Cuban uses the fear of failure and his desire to win to motivate himself, and Lew Frankfort insists on an enormous amount of research before launching a new enterprise within Coach COH +1.26%. And by fearless, does Cisneros mean fearless after preparation, or fearless without it? To understand this, it helps to know the level of planning and analysis Cisneros undertakes BEFORE launching major endeavors. As an example, before he purchased the deteriorating Univision from Hallmark and built it into a powerhouse with two partners, he did the following:

He understood the weakness of Telemundo, his key competitor for the U.S. Hispanic market He knew his partner Emilio Azcrraga Milmo from their previous work together and understood his strengths He knew that they needed an American partner who was an expert on American television, and picked Jerry Perenchio, who had owned the station where Cisneross manager had worked He knew that both he and Azcrraga Milmo had content from their TV companies in Mexico, Central and South America, and they could channel these shows into Univision. As Pablo Bachelet (Cisneross biographer) notes, content is to TV as water is to land, and the two partners had plenty of content between them. So they were leveraging their assets. He worked for almost a year to get both partners in the deal and spent that time to develop an agreement that was a hedge against the bad tempers of his partners (from Bachelets book).

Based on my interviews with, and analysis of, the practices of Cisneros, here are some suggestions to overcome fear:

Do your due diligence and understand everything that can go wrong Develop strategies to minimize the risk of failure Understand and leverage your competitive advantage to stack the odds in your favor Get the right ingredients and partners, perhaps those with whom you have worked before, to know why you will succeed even before you start Launch with full intensity and courage.

MY TAKE: Get started on your dream when the pain of inaction exceeds the fear of action. As Tom Robbins noted in Even Cowgirls get the Blues, Heaven is living in your hopes, and hell is living in your fears. It is difficult to conquer your inner demons, and one of the worst demons is fear. Are great entrepreneurs fearless? What I have found is that the common factor among most billion-dollar entrepreneurs, and especially the ones I interviewed, is that they started when they found their passion, which helps to overcome fear. Usually they were young, but age was not a barrier. Col. Sanders was said to be in his 60s when he started KFC. Fear can be good if you prepare for it, understand the situation, reduce risks, develop your strength, test your advantage, and use this confidence to jump in. During the Cuban struggle for independence, Emilio Bacardi (in their ads) noted that if we have to die, so then we die. My suggestion do not die before you are dead.