My Worst Investment Ever Podcast

Rand Fishkin is CEO & co-founder of SparkToro, author of Lost and Founder: A Painfully Honest Field Guide to the Startup World, and previously co-founded and ran Moz. Since publishing his book in 2018, he has earned 4.7 stars out of 5 from 170 reviews, a remarkable achievement!   “Find something you’re passionate about, where you can add unique value, and where your audience wants to pay attention. Nail those three, and you’ll do great marketing.” Rand Fishkin   Worst investment ever Time to grow business funds Rand’s worst investment ever happened when he was the CEO of Moz. In 2011, the company turned down an acquisition offer from HubSpot, a very well known marketing platform. At the time, Moz had been growing at 100% year-on-year for about six years in a row and producing about $11 million in revenue. In 2012, Moz sought to increase funding and got $18 million, of which $15 million came from a new investor, Foundry group, and $3 million of it came from a previous investor Ignition Partners. Venturing into more forms of marketing Rand’s company used the Venture Capital (VC) funding ostensibly to grow the business from just providing search engine optimization tools and software to providing different aspects of web marketing, email marketing, content marketing, PR, and social media marketing. Essentially, all of the new forms of marketing that Moz had not served previously. Cutting off what was working Over the next few years, the company cut off all growth of its software platform. As a result, existing products stopped improving and staggered. While their competitors kept making investments, Rand was pouring all of his new money into hiring a huge team, trying to figure out the new management structures, growing his offices, and acquiring other companies. Rand thought that by putting on hold what was previously working and putting all his energy into launching his new idea, the new venture would propel Moz into superstardom with this exciting and incredibly broad software suite. The horrific failure The new venture fell flat on Rand’s face. Moz’s growth rate fell from 100% year-on-year to 50% and then from 50% to 25%. Over the years, Moz continued to plateau in terms of growth and was surpassed by two direct competitors – SEMrush and Ahrefs. Over the last few years, Moz has tried to recover and refocused on SEO after a big round of layoffs in 2016. Stepping aside While the company was still profitable, the failure put a massive strain on the company and Rand. He was not able to handle it well and had an emotional breakdown. Rand ended up stepping down from the company, replacing himself with the chief operating officer who’s still the CEO today at Moz. The myth that leads even the best of us to failure Rand’s biggest driver to his failure was believing in the myth that once you have invested, made a decision, and gone down a path, you have to keep pursuing that path until you see it through to determine whether it was the right decision or the wrong decision. In reality, the right thing to do is to release one small thing that puts you in this direction and see if that works. And then another little thing in the same direction and if it also works launch another. Don’t do anything big until you’ve released a small series of things and validate that your market wants this. Lessons learned Have structure and incentives in place Structure and incentives matter more than almost everything else when it comes to business success. Know what you’re signing up for before accepting venture capital VC financing comes with a lot of glitz and glamor, and you get a lot of media attention. Don’t fall into the trap of chasing the glamor at the expense of serving your customers, your employees, and your happiness. Find the in-between financing model Today, there are financing models in between being wholly bootstrapped trying to build a business with your own or your family’s funds and building a business with institutional investor capital. Don’t be afraid to explore such models. Andrew’s takeaways You can’t do everything Don’t be addicted to growth, and try to do everything. Things seem easier on paper than they are. Companies just can’t do everything. The startup world is a trap Small businesses are trapped. So be very careful when you go in. You can have all the dreams that you want, have a billion-dollar company, but for the majority of people, it’s pain and despair. Leave risk management to the board As the CEO, your job is growing the business while that of the board is reducing risk. When a board gets caught up in growth, they betray their obligation to the bigger world. Let the CEO in the management team propose the growth plan while the board handles the risks. All board members should, therefore, understand the role of risk assessment and risk management. Do not let investors push you Listen to different opinions, but do what’s right for you. Do not be dragged into hitting quarterly profit numbers and all that. Don’t be the CEO who spends time building a competitive advantage and chasing your tail because investors are pushing you. Actionable advice When looking for business financing, be sure to recognize what you’re signing up for and commit wholeheartedly to one path. So if venture capital appeals to you, just understand why to make sure it’s the best choice for your business. No. 1 goal for the next 12 months Rand’s number one goal for the next 12 months is profitability. SparkToro just launched, and so Rand’s main focus right now is trying to get it to a profitable, sustainable business. Parting words   “If the world around you is guiding you in a particular direction, if the sources that you read and follow, the people that you listen to and admire, are pushing you to go in one particular direction, it pays to explore the alternatives.” Rand Fishkin   Connect with Rand Fishkin LinkedIn Twitter Facebook Website Blog Email: rand@sparktoro.com Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

John Lee Dumas (JLD) is the host of Entrepreneurs on Fire, an award-winning podcast where he has been interviewing the world’s most inspiring Entrepreneurs. With more than 2,000 episodes, one million-plus listens a month, and seven-figures in annual revenue, JLD has learned a thing or two about podcasting. I learned about podcasting from John and joined his podcaster’s paradise in 2014. It is a community of more than 2,500 people and is the place to go to if you want to become a podcaster. I highly advise those who wish to become podcasters to go to the Apple Podcast called “Free Podcast Course” and listen up.   “I never have since then created something that I didn’t first get proof of concept by actual people investing actual dollars into that offer.” John Lee Dumas   Worst investment ever Clueless college investor When JLD was in college, he found this penny stock after reading some guy’s website. The stock was six cents at the time. JLD invested $1,000 instantly and planned to sell when the stock got to eight cents. He left it at that and went to class. Rich in 45 minutes JLD came back 45 minutes later, and the stock was at 12 cents. In literally 45 minutes, he’d made 1,000 dollars, which for a college student was a big deal. So he thought this is the best way ever to make money. So he cashed out immediately and sold his stock. Then the stock went up to 18 cents as he watched. JLD regretted selling and so out of guilt, he bought the stock at 18 cents and went to bed. He woke up the next morning and logged in around 11 am and the stock was down at 3 cents. JLD experienced first initial luck to double his money and then lost it all, and all this within 24 hours. Fast forward to 2013 In 2013, JLD was one year into Entrepreneurs on Fire when he thought it would be a good idea to come out with a course with an offering. He’d built an audience through his podcast and understood what it means to generate revenue online. So he sat down and came up with this great business idea. JLD’s idea was going to be this podcast platform where customers would simply record their episode, send JLD the mp3, he would edit it, add the intro and the outro, upload it to Libsyn and distribute it out to all the podcast directories. Putting his heart and soul to his offer JLD invested heavily in this idea. He hired about 10 people to work with the clients he had hopes of getting. He invested a ton of money, time, and bandwidth into it. And then he opened the doors. He couldn’t have failed faster Upon launching the offer, JLD got just two clients. One of them asked for a refund within 24 hours. The second one ended up being a nightmare client. He quickly learned that this was an incredibly lousy investment and decided to call it quits. Despite the offer being his worst investment ever because it costs a lot of time and took a lot of money, he was glad to have walked away and not let the sunk cost fallacy take him down. JLD went on to create another offer, after proper planning, and it remains a massive success to date. Lessons learned Listen to your audience Before you create an offer, ask your audience what they want. Find out what’s their most pressing need and the most suitable solution, then offer them that. Listening to your audience will guide you in creating an offer they will want to pay for. Get proof of concept first Before you create something, get proof of concept by getting a few people to invest actual dollars into that offer. Your timing could be everything Just because your offer doesn’t work the first time doesn’t mean that it’s a bad offer. The timing could be the reason. Your offer could be something that works down the road when the time is right. Don’t let the sunk cost fallacy take you down If your offer fails, don’t keep pushing it just because you invested your money, time, and energy in it. You’ll only be digging yourself in deeper. Take a pause and re-evaluate your offer then give it a second go. To succeed as an entrepreneur, learn how to avoid the sunk cost fallacy. Andrew’s takeaways You always have something of value to offer Sometimes you can get confused about what value you bring to the audience. Your voice, your experience, can end up being the thing that people are willing to pay for. Talk to your audience and find out what they find most valuable about you. No. 1 goal for the next 12 months JLD’s number one goal for the next 12 months is to complete his first traditionally published book, called The Common Path to Uncommon Success. So the first hour of every day for JLD, Monday through Monday, Saturdays, and Sundays included is spent writing this book. He plans to publish the book in the spring of 2021. Parting words   “Try not to become a person of success, but rather a person of value. Those words are from Albert Einstein, and they changed my life back in 2012.” John Lee Dumas   Connect with John Lee Dumas LinkedIn Twitter Facebook YouTube Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Dennis Mortensen is an expert in leveraging data to deliver business insights. A serial entrepreneur, Dennis built and successfully exited several companies before founding x.ai in 2014, a company that is solving a painful problem—scheduling meetings—through a sophisticated AI platform that saves people time and effort. Dennis is a recognized leader, author, and university instructor in the field of digital data and analytics. Originally from Denmark, Dennis lives in New York with his family.   “Any startup is just the class of bad decisions. And the danger is that one of them might just be so bad that it kills the company. You just don’t know which one it is; you’ll know when it’s done.” Dennis Mortensen   Worst investment ever Dennis ventured into his first successful venture in 1996 when he started an internet company. He was the sole investor financing the startup on cashflow. He ran the startup for four years, and in 2000 he sold it for $11 million. At 27 years of age, $11 million was undoubtedly quite a kill. Moving onto the next successful venture Excited to have hit huge success with his first venture, Dennis took all the money he got from selling the company and invested it in another startup, a food delivery service this time around. From his projections, this was going to be an excellent investment. So Dennis jumped in the deep end, money in both hands, and started to build up the team. Soon enough, the company was driving up revenue. Doing things a bit different Dennis decided that he would run his business model a bit different from other similar services. He charged slightly higher for the service; however, if the customer had any complaints about their orders, Dennis’s company would shoulder the blame and not the food vendors. Slowly but surely, this business model started eating up his cashflow and affecting revenue. Pride comes before a fall As fate would have it, Dennis got the opportunity to turn things around for his business. Another delivery service that grew to become the most prominent food delivery service company in the world approached Dennis with a merger proposal. Dennis did his research and learned that indeed this would be a great merger. He got into negotiations with the company. The company offered him an 18% stake, but he negotiated to 23%. The company was adamant about offering him no more than 18%, which was still a staggering amount as Dennis would be the single biggest shareholder in that company. In his delirious optimism, Dennis declined the offer and opted to keep running his business on his own. Three months later, this decision came to haunt him when he had to fold his business as he had no cash flow left. The delivery company he walked away from is now worth 10s of billions of dollars. Lessons learned You win some you lose some Entrepreneurship is just a game you play to win, and sometimes you will lose. But there’s a game tomorrow as well. Don’t attach your life’s worth to the success of your company. Don’t dwell on the losers If you invest in a startup company or start a business and it doesn’t work, don’t dwell on it. Dust yourself up, learn from the loss, and move on to the next winner. Andrew’s takeaways Don’t make the wrong mistake You can make many mistakes, but don’t make that one wrong mistake that’s going to kill your business. Don’t be afraid to think differently When you find an entrepreneurial space that’s yet to be explored, no matter how crazy it seems, if it’s viable, go for it. Actionable advice Think of entrepreneurship as a career, not a moment in time where you must try a venture out, and once done, you’ll go back to your day job. This way, you dedicate your life and not just a moment in starting ventures that work and move on from those that fail. You’re not in some kind of hurry to get it done. No. 1 goal for the next 12 months Dennis’s number one goal for the next 12 months is to send his lastborn daughter to college, and together with his wife, they can finally enjoy a quiet house. Parting words   “Stay happy!” Dennis Mortensen   Connect with Dennis Mortensen LinkedIn Twitter Facebook Instagram Blog Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Ranveer Brar is a television celebrity, Masterchef India judge, author, restaurateur, food film producer, and benefactor. To put it simply, chef Ranveer is one of the most celebrated chefs in India. His popularity on television is matched by his tremendous fan following on social media as well. Getting the basics right and revering the kitchen as an artist would his/her studio, are mantras he lives by and propagates to others as well. With a bestseller in his kitty, a popular host, and judge on television and an artist both in and out of the kitchen, chef Ranveer calls himself a food-Sufi on a constant culinary quest.   “Failure is a part of your journey. It’s the outcome of the journey that matters. You can’t choose to end the journey when you want to; the journey will end when it wants to. You have to get up and play along.” Ranveer Brar   Worst investment ever Ranveer got success very young. He was an executive chef at 25, an age when a lot of people would be at least four levels below the post of an executive chef. Ranveer had met and been mentored by the right people. Nothing would stop him at this point. Chasing his passion Even though Ranveer was excited to be an executive chef earning a considerable salary, a year or so later, he got bored. Executive chefs in hotels in India don’t get to cook. And at 25, all he wanted was to use his hands to cook. A bunch of friends that Ranveer met on a trip to the US told him about someone who wanted to start a restaurant. They encouraged him to talk to him and partner up, and he figured why not. One day Ranveer was constructing a pizza oven in his hotel and had his head inside the oven when he got a call. The guy said, “Well, here we are, you want to do a restaurant, want to team up?”. Without a second thought, or asking him what the restaurant would be about or what the plans were, Ranveer said yes. So the same day, Ranveer typed his resignation, gave it to his general manager, and a month later, without much forethought, flew to the US to start a restaurant. The ceiling that kept the restaurant doors shut The restaurant was extremely design-driven. So the investment both in terms of time and money on the design was huge. The restaurant had a million-dollar ceiling that caused delays because the designers couldn’t get it right. They kept breaking and rebuilding the ceiling. Being a hotel chef, Ranveer did not bother about such things; he was simply focused on getting stuff for his kitchen. He just wasn’t an entrepreneur in the sense of the word. Shifting gears Gradually, the restaurant was ready to open its doors. The partner decided that they shouldn’t do Indian food but modern Asian cuisine instead. He argued that Indian food was overrated. Ranveer didn’t question the decision. He just went with the flow, something he came to regret later. The wrong business model Ranveer and his partner also decided to make the restaurant a small plate restaurant. Ranveer didn’t know much about business models, so again he just went with the flow. Unfortunately, the model didn’t bring them much revenue given the investment put in and the effort made to run the restaurant. Losing connection with food While Ranveer is a talented chef, he just couldn’t connect with the Asian menu. His cooking techniques were perfect, and he was making great food, but he wasn’t enjoying the job as he had hoped he would. Ranveer couldn’t help but wonder if entering this partnership was the right move. Going on a downward spiral Given his lack of connection with food and the low revenue, things between Ranveer and his partner became bad, leading to deliberate discontent. One day, as Ranveer was having a beer with his friend on his day off, the partner called him to his office. He told him that since he was running an Asian restaurant, he might as well hire an Asian chef. He then handed Ranveer a $5,000 check and thanked him for his services. And just like that, he found himself jobless in a foreign country, all the effort and money invested in the partnership gone. Lessons learned What works for the other person will not necessarily work for you If something is working for somebody else, don’t just do it because it’s a trend. There is no guarantee that it will work for you too. Every problem is unique; every solution is unique. Be prepared To be a good businessman, you have to be prepared before starting a business. Always remember that there is a delicate balance between being prepared and the confidence of winging it. Don’t be over-prepared, but also don’t just depend on winging it. Let creativity fuel your business Let your creativity be an advantage and not a hindrance to running a successful business. Some people forget that they are running a business and become a completely crazy creative artist whose passion completely overshadows and overpowers their business. Don’t be yoked by denial Don’t wish your problems away, deal with them. There’s no right or wrong way to deal with your problems. Just don’t go into denial and close your eyes, and believe that the problems will go away. Don’t look for top-shelf solutions If you want to learn how to be a successful businessman, you have to learn how to prod deeper before making business decisions. Prod yourself deeper, prod people deeper, and ask more questions. Instead of looking for top-shelf solutions, understand what you’re trying to do and achieve so that you can be able to contribute to the solution genuinely. Andrew’s takeaways Passion alone won’t make you a successful entrepreneur Don’t get overpowered by your passion and forget about the business model. You still need to earn revenue to be a successful entrepreneur. Always be you Be more of who you are. You don’t have to be anything but yourself. Make your connection to food, to the earth, to people, or to whatever it is that you connect with best. Your life’s journey will sometimes be a little bit turbulent, sometimes it’s smooth, but don’t fight it. Follow that path, that passion, and be more of who you are. Tough times don’t last, but strong people do You will make it through difficult times. Losing money in business is not illegal or even unusual. When it happens, just let go and restart. Just don’t let go of your friends, family, and relationships. Actionable advice Don’t compare yourself to successful people and bring yourself down. Everybody has a different story and a different journey. It’s the outcome of the journey that matters. No. 1 goal for the next 12 months Ranveer’s number one goal for the next 12 months is to have one product out there that solves a bigger need and a bigger problem. A product that he can focus on and be happy about for the rest of his life. Parting words   “Keep eating. To be happy, you need to have a happy relationship with food.” Ranveer Brar   Connect with Ranveer Brar LinkedIn Twitter Facebook Instagram YouTube Blog Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Neil Patel is a New York Times Bestselling author. The Wall Street Journal calls him a top influencer on the web, Forbes says he is one of the top 10 marketers, and Entrepreneur Magazine says he created one of the 100 most brilliant companies. He was recognized as a top 100 entrepreneur under the age of 30 by President Obama and a top 100 entrepreneur under the age of 35 by the United Nations.   “Have the mindset of testing. What works today may not work a year from now. If you don’t keep testing, you’re not going to thrive and succeed.” Neil Patel Worst investment ever Creating a business to solve his own problem About 10 years ago, Neil’s website, at the time, was doing pretty well, so much so that sometimes he’d get a flood of traffic from social media. This upsurge in traffic would cause his servers to go down. This sounds like a good problem to have, right? While Neil appreciated the tremendous traffic, he had to pay for more and more servers. But then, in most cases, he would never use the extra resources. He thought to himself that it would be a good idea to be able to pay for the resources when he needed them, and not pay for them when he didn’t. Taking matters into his own hands Neil figured that there must be other people who were in a similar situation paying for all these resources and not using most of them. “What if we combine all our servers and have one big infrastructure, and we can each scale up and down as we want?” he thought to himself. Right there and then, a business idea hatched. Neil went to work to start Vision Web Hosting. The multibillion idea that sucked While Neil’s idea was a good one and would have seen him make millions of dollars, a few things turned it into his worst investment ever. First, Neil had no experience in hosting. Second, he picked partners that had no experience either and just paid them because they told him they could do it. Third, hosting was just not Neil’s core focus. He was doing many other things that had him distracted, and so he wasn’t focusing on it. Essentially, Neil ended up spending over a million dollars to start a business that wasn’t generating any revenue. He didn’t even get to launch it. His partners couldn’t figure out how to execute his idea. Eventually, Neil folded the business and had to figure out how to repay all the money that he borrowed to start the business. Lessons learned Ideas are worthless if not executed right Ideas are a dime a dozen. They are worthless unless you pick and execute the right ones. Partner with experienced people Pick business partners who have done it before because they come with learnings instead of starting from scratch and having to learn on the job. Start a business with a minimum viable product If you’re going to start a business, start with a minimum viable product and get it out there. You are never going to have a perfect product. It’s never going to be amazing. Just get something out there and improve it over time. Andrew’s takeaways Sometimes you’re just not ready to join the big leagues You may have a great idea that you want to launch in the global market, but before you go competing in the big leagues, ask yourself if you’re ready to do it. Do you have confidence in your operations? Do you have the money to do it? Do you have the right workforce? If not, accept, pull the plug and wait until you’re ready. Four main things to look for when investing in a startup 1. Trust Do you trust the team that you’re investing in? Usually, there’s no hack to trust. Trust comes over time. 2. The idea What’s the startup’s idea, and is it a viable one? 3. Execution Is the team able to execute on this idea? If the answer is no, it doesn’t matter that the idea is excellent, it doesn’t matter that you trust the team, the idea won’t work. 4. Money Ultimately, you never want to be the only one providing money to any startup that you’re involved in. The startup should have other sources of investment funds. Learn the 18 Questions for Pre-Revenue Valuation of a Startup. Actionable advice Experiment, experiment, experiment. Don’t wait. Don’t say, “Oh, I got to learn more. I’m gonna do it next week.” Just go experiment, do it as quickly as possible, and learn from your mistakes. Learning from your mistakes is a vital part because you don’t have to be the smartest person to succeed if you make a lot of mistakes, but you avoid making the same ones over and over again. Eventually, the right ones will be the only ones that are left. No. 1 goal for the next 12 months Neil’s number one goal for the next 12 months is to double up on his traffic. He’s looking to gain another 10 million visitors a month. Parting words   “It’s very, very important to think about every mistake that you’ve made in business and what you’re trying to achieve in life, write it down, and avoid making that same mistake over and over.” Neil Patel Connect with Neil Patel LinkedIn Twitter Facebook Instagram YouTube Blog Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

Howard Whiteson’s economist father made him familiar with financial principles from a very young age. As a teenager, however, Howard rebelled and suffered deep debt and economic chaos. Having journeyed from that low point to master his finances, Howard has spent some 20 years as an expat, the last six in Shanghai, China. He uses a proven 5-part process to empower executive expats at such corporations as Apple, Coca-Cola, and Gucci to create, transfer, and protect their wealth internationally. To find out more, visit Wealth Without Borders.   “Rather than trying to conquer the entire world of finance, gently take small steps into that world.” Howard Whiteson   Worst investment ever Driving his way into debt It’s a bright summer’s day in Rolling English countryside, and Howard is in his hybrid sports car, with the sunroof down the music going, feeling like a million bucks. He’d just recently bought that car. It was one of the first hybrid cars made by Honda. He was very proud of all the gadgets and gizmos. Howard had spent 28,000 pounds on it, about 40,000 dollars. Riding on a promise Howard had just had two CEOs tell him that they wanted to work with him on a retainer basis. He was proud, confident, and dashing. What better way to celebrate than to spend all his money on the car of his dreams. He was going to be rich soon, anyway. His dreams turn to dust So in his sports car, Howard drove to one of the CEO’s offices in a farmhouse in the middle of Essex countryside, got out of the car, and walked in to see the CEO. The CEO told Howard that the company was letting him go. He’d worked for the company for about 12 years. The news was a huge shocker. As if that was not a blow huge enough, within a few weeks, the second CEO had the same story to tell Howard. He also let him go. So Howard went from being very comfortable and very well off into deep debt and a lot of darkness. He was now tens of thousands of pounds in debt. Letting rebellion rule over him Howard’s father was an economist, and so he grew up learning all about the stock markets, about bull and bear markets. But as an adult, he chose to rebel and ignore all the knowledge he had gained. Howard’s attitude towards money was that it was the root of all evil. It was all a capitalist plot. He believed one should live for today and forget about tomorrow. This kind of attitude led him directly into that dark abyss of financial chaos, debt, and struggling to make ends meet. Hitting a brick wall and making a turnaround Howard was now scrambling for a job. Luckily he had some close friends who managed to connect him to a job soon enough. He enjoyed the new job, but it was tough work and unrewarding. Howard was still struggling to pay off his massive debt. This remains the lowest point in his life where he felt he’d hit a brick wall. What pulled Howard out of this rut was the deeply rooted financial awareness that his father had implanted within him. He finally realized that if he continued along on this trajectory of debt and chaos, he would end up in a very sad place. So Howard dusted himself up, started applying the knowledge he’d learned from his father, and managed to pull himself out of the worst investment ever. Lessons learned Art and finance jell perfectly Art and creativity and maths and finance are not opposites. They overlap and inform one another. There’s a sense of discipline within creativity, and there’s creativity within the world of finance. Acknowledge you’ve made a financial mistake If you ever find yourself in a financial crisis, stop the denial, the rebellion, and just acknowledge that you’re in a dark place, and you’ve got to do something about it. Most importantly, work on gaining financial literacy to avoid future mistakes. Andrew’s takeaways Don’t be afraid of learning about money and investing For a lot of people, money and investing are painful topics mostly because they feel overwhelmed, trying to understand the markets. Don’t let the overwhelm stop you from investing; just keep learning. Build financial security Start investing early and build financial security into your life so that you can enjoy retirement. Actionable advice Take 10% of what you’re earning, if possible, automate it, so it goes, at the very least, into a high-interest savings account or a range of good funds. Divide that money three ways and put it in stocks, bonds, and property. This is a great way to start investing. If you can’t afford properties, there are low-cost funds you could consider. Such investments will build over time. No. 1 goal for the next 12 months Howard’s number one goal for the next 12 months is to be a great dad to his seven months old daughter and a great husband. He also plans to continue learning and developing and simply never stop that process. Parting words   “If you gain value from listening to this, then I will have suffered without it being in vain.” Howard Whiteson   Connect with Howard Whiteson LinkedIn Twitter Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Nicholas Hinrichsen was born and raised in Germany and played on the German National Golf Team and studied Computer Science and Finance in Germany, Chile, and Australia. At the start of his career, he looked into consulting and investment banking but instead joined a renewable energy startup that invested in projects in China and India. In 2011, he moved to the US to get his MBA at Stanford Business School, and by 2013 he started a company called Carlypso. He brought that startup through YCombinator in 2014, raised $10 million in venture funding by 2015, and sold the company to Carvana.com in 2017. Carvana went public at a market cap of $2.5B and is now the most valuable used car retailer in the US. Nicholas and his co-founder, Chris Coleman, recently left Carvana to start WithClutch.com, a fully digital platform that lets car owners refinance auto loans from the comfort of their own home. The team at WithClutch.com has seen that in the US, only 5% of auto loan applications were refinancing, yet 47% of all funded mortgage applications were refinancing. So, they are going to change that!   “To succeed as a startup, all you need to do at the very beginning is to leave the building and talk to customers.” Nicholas Hinrichsen   Worst investment ever Young investor When Nicholas was 16, the only thing he knew how to do well back then was playing golf. Then all of a sudden, his friends in school, even some golfers, started talking about investing in technology companies. Nicholas had about $2,000, which was a lot of money for him at the time. His friends told him to invest the money because he could easily 10x that money. Afraid to miss out As everyone around him continued to invest in the tech companies, Nicholas decided to look into it because he felt like he was missing out. He signed up for an account online, went to the physical branch to verify his identity, and then eventually got access to the stock market. Now with an account, Nicholas could shop around for a company to invest in. But with so many options, he was baffled. One of his friends advised him to buy some magazines and then just read about the stocks in these magazines because the magazines wouldn’t recommend buying those stocks if they weren’t the best. And that’s precisely what Nicholas did. Making his first investment and mistake Nicholas didn’t know any of the companies in the magazines, but one resonated with him because that happened to be Germany’s biggest telecom. He felt that this would be a good choice. Nicholas took the money he had and used it all to buy the stock at $120 per share. Sadly, that remains the highest price the stock has ever traded. The stock price went downhill a few months after Nicholas bought it. First slowly, then rapidly, to a point where Nicholas was just watching from the sidelines as the price went down to zero. Finally letting go of his worst investment Nicholas somehow held onto his stock for years, even though he wasn’t making any returns on it. A few years later, he moved to the US for work. He wasn’t allowed to hold a foreign account, and so he was forced to transfer his portfolio in Germany to his US bank. However, he decided that the lousy stock was not worth the effort and so he sold it and counted his losses. Lessons learned The stock market is tricky Succeeding in the stock market is harder than winning the gold medal at the Olympics, so brace yourself and go ready to give it your all. Don’t hold onto cash Cash is not as great as people think it is, especially if there’s inflation. You lose money in the long run by keeping cash in the bank. Invest in a diversified portfolio Manage risk by investing in a diversified portfolio and hire a fund manager to manage this portfolio. This removes emotions out of the investment. Invest for the long term You can only make or preserve your wealth if you’re investing for the long term. Humans act either out of fear or out of greed When it comes to investing, neither fear or greed helps you make wealth. Fear makes you sell your stock when the stock market goes down because you’re afraid it could go further down. Then you miss the upswing. When stocks go up, you get greedy and go into the market, but what you don’t realize is that you’re paying expensively. Andrew’s takeaways Avoid FOMO when investing in the US stock market Be very careful when listening to other people talk about their investments and wanting to do it too because they sound so successful. People only talk about their wins and rarely about their losses. So do not believe everything that you hear. No action in life that is risk-free Every single action has a benefit and a cost. If you put money into the bank, and you don’t get the interest payment, it doesn’t grow. Now you have exposed yourself to shortfall risk, the risk that the money that you need at retirement will not be there. Actionable advice Sign up for a diversified portfolio and get a fund manager to manage it for you. No. 1 goal for the next 12 months Nicholas’s number one goal for the next 12 months is to build another company that impacts people and hopefully makes life better in the US. Parting words   “Run risks, but be smart. Know which risks you’re taking, be very deliberate, and choose the ones that you have under control. Then outsource the ones that you don’t to somebody who’ll have them under control.” Nicholas Hinrichsen   Connect with Nicholas Hinrichsen LinkedIn Twitter Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class How to Start Building Your Wealth Investing in the Stock Market Finance Made Ridiculously Simple Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Jason Zweig (2007) Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich  

Wim Steemers has a 30-year career working in over 40 countries around the world, of which the last 20 years were spent in funds management at AllianceBernstein, Macquarie, Colonial First State, and AL Capital. While educated at the University of Chicago’s Booth School of Business, he always had his doubts about the Efficient Market Hypothesis, and he followed the development of Behavioral Finance over the years with keen interest. While he has a traditional fund management role at AL Capital, he spends his free time with his Rosevalley Funds, where he puts into action what he suspected for a long time: there has to be a way to take advantage of the systematic biases that exist in human behavior.   “People do not always behave rationally. They make errors in a particular direction, and if you’re aware of these behavioral biases, you’re gonna make money.” Wim Steemers   Worst investment ever New technology rouses his curiosity In 1999, a new technology of doing laser operations on eyes to correct vision piqued Wim’s interest. Wim had been wearing glasses since he was four years old, so anything to correct his vision was bound to interest him. Though the technology was relatively new, it had been proven to work, but it was still quite rare and expensive. Wim, however, decided to do it. Falling in love with the product The laser procedure took about 15 minutes, and voila Wim had perfect vision. For 30 years, Wim had not been able to see further than a meter ahead without glasses. When he walked out of the room, and he could see perfectly. It was literally as if the sun had risen for the first time in his life. The machine used for the laser procedure was big and cost a million dollars at the time. It was made by a Canadian company that was listed in the stock exchange. When Wim walked out of that operation, he was so impressed and believed that this machine was going to take the world by storm. So he bought shares in the company that made that laser equipment. The company wasn’t as good as the product Within about a year, Wim lost all his money after the company went bankrupt. Wim had done no research and simply thought that the laser machine was so great the company must be doing well. So it turned out that there were competitors that had cheaper products and better laser machines. So the company just couldn’t compete, and that’s how Wim lost all his money. Delving into the Korean investment market In the year 2000, while working as a junior analyst, Wim got a chance to delve into the Korean stock exchange. At the time, Asia was just getting out of the 1997 Asian financial crisis. The crisis caused widespread bankruptcies as banks in Asia continued to fail. Banks now had to find new ways to attract customers. The credit card revolution Banks in Korea discovered credit cards. Credit cards hadn’t existed in Korea before, and the only credit card as we understand it, which means you can rollover the balance and borrow money, was Citibank’s. What existed were charged cards that were automatically debited at the end of each cycle. You couldn’t use them to borrow money, so they weren’t actual credit cards. Credit cards hence became a nice source of income for the banks. The government loved the idea too The Korean government saw this as an opportunity to stimulate the economy. But more importantly, when people pay with credit cards, the government could track those transactions making it easier for taxation purposes. So the government put in measures to promote the credit card idea. The government made it mandatory for businesses to accept credit cards. Also, every credit card receipt was automatically a lottery ticket. So numbers on each credit card receipt were put in a draw, and a car would be won every Friday. Also, for people paying taxes, they could deduct 10% of all their credit card receipts from their taxes. These were significant incentives for people to use credit cards. The banks, of course, loved it too, because it was good business for them. As the credit cards became popular, companies grew bigger and bigger, and some even got listed. Looking into investing in banks As a junior analyst, Wim had prepared a research package, and his recommendation was to buy the shares of Kookmin bank. Kookmin bank was one of these banks that had a rapidly growing credit card business. The bank had a separate entity called Kookmin credit card, which they had listed on the stock exchange. Wim liked the idea of investing in this bank because it was more diversified with a business bank and a deposit business. Following due diligence As a professional analyst, Wim was not quick to make the recommendation. He did his background research first. He had a few doubts, but it happened that every objection he would make in his analysis and every risk factor he would flag, mostly, there was an answer for that. Buying into the stocks anyway The company went ahead and bought Kookmin bank shares. Shortly after, credit card arrears started to rise rapidly, then they became relentless, and soon the share price started to go down. Now all the credit card companies in Korea were releasing monthly arrear stats and aging profiles. Cutting the losses fast As the analyst responsible for the stock, Wim did his research and was able to predict that things would only get worse. Shares prices had now gown down by 50%. When a window of opportunity showed up, Wim went to the chief investment officer and the portfolio manager. He told them it was time to cash out. Wim explained to them that they would make all their money back in the next 18 months; however, when the shares start going up, Kookmin bank would take out the minorities and keep all shareholding inhouse. Thankfully, the bosses listened and sold the company shares before that happened. Unfortunately, the company had lost about 50% of its investment money. Lessons learned Liking a product doesn’t make the company a good investment Buying a stock in a company because you love the company’s product is not a good strategy. Stand up for your convictions As an analyst, always fight for and state your convictions unapologetically. Also, avoid groupthink because it is a potent but dangerous thing. Be wary of something that seems too good to be true If something seems too good to be true, it probably is. And if something feels risky, it probably is. So before you invest in it, take a step back and see what’s happening here. Culture doesn’t trump cash Cultural biases are not a guarantee of the success of an investment. Put culture aside and do your usual due diligence when conducting your research. Andrew’s takeaways Risk management is not always straightforward The job of risk management, ultimately, is to say, we know the risks, and we’ve got them covered. But the reality is, it just doesn’t happen that way. Make your buy-sell decision after your research It’s imperative from an analyst perspective when analyzing a situation that you do not make your buy-sell decision until the end of your research process. Actionable advice Avoid groupthink at all costs. However, to be successful at investing, you need a team approach, but make sure that the team is set up properly. No. 1 goal for the next 12 months The company Wim is working with has a grand vision of turning the small idea they have now into something bigger. Wim’s number one goal for the next 12 months is to see that through. Parting words   “Don’t learn from your mistakes; learn from somebody else’s. So please, listeners learn from these mistakes.” Wim Steemers   Connect with Wim Steemers LinkedIn Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Oladipupo “Dipo” Ehindero is an independent analyst and was Head of Research of a mid-size asset manager before pursuing his Master’s degree. He has been in the research and investment banking space for over 10 years. He also has a passion for human resource management, having previously worked in that area.   “Never play with your documentation. Make sure you keep personal records of every single transaction.” Oladipupo Ehindero   Worst investment ever Oladipupo was on an internship with an asset manager in Lagos when the federal government of Nigeria made law through the central bank that all the banks in Nigeria should recapitalize. So he was told to also participate in bringing clients and advise them on what to buy and what to sell. Oladipupo went out and began making cold calls, meeting high net worth individuals, and trying to build his network. Landing his first client Oladipupo finally met a lady who was looking to invest her money in a bid to raise college money for her two daughters. The lady didn’t have a lot of money; nonetheless, it was a substantial amount to invest. Oladipupo advised her to split her investment money into two, and they invested one half in bank stocks and the other half in a medical diagnostic company. Ignoring his senior’s advice Oladipupo was feeling quite excited after landing this client as he was now more confident about his career growth. One of the senior managers got to know about Oladipupo’s client and the investments they had settled on. While he was proud of Oladipupo’s effort, he advised him not to invest in the bank he had chosen because the president of that bank didn’t have a good reputation. The manager suggested another bank whose MD was a better person than the president of the bank he had invested in. Oladipupo, however, felt that all the banks were the same, and thus he trusted that his choice was good enough for his client. Time to cash out A few years later, Oladipupo received a call from his client, who informed him that one of her daughters had been accepted into a medical school in Hungary and wanted to know how her investment was doing. At this point, her portfolio had grown from $10,000 to $57,000. This was enough to kickstart her daughter’s education in a year. Tragedy strikes Three months after Oladipupo talked to his client, the president of Nigeria died, and the vice president became the president. A new bank governor also came in, and the first thing he did was to say that some banks had been using the recapitalization money for illegal purposes, such as investing in the oil and gas sector. So he removed the bank MDs from the opposition and nationalized the banks. The bank that Oladipupo had invested in for his client issued a profit warning saying that it wasn’t going to make as much money again because they had a lot of bad debt to figure out. Stocks that were roughly selling for 60 Naira per share were now selling for approximately 10 Naira per share, an 80% drop! The client wants her money now Oladipupo’s client came to his office in tears; she desperately needed the money for her daughter’s tuition because turning down or defaulting the medical school admission was not an option. But no one was willing to buy stock from the bank that was practically on its knees. His parents come to the rescue Oladipupo talked to his parents about the situation with the client, and they committed to helping him out. His parents decided to take up the investment and had the stocks crossed into their account. They took out a loan and paid the woman off by the sum of $5,000 equivalent to what she had initially invested three years ago. His woes were not yet over Unfortunately, the stocks kept losing value to a point where Oladipupo’s parents had to sell some of their properties to pay off the bank loan they used to pay the client. The stock prices fell from 60 Naira to 3 Naira per share. Oladipupo’s parents consequently lost a lot of money on the investment. Lessons learned Enthusiasm is good, but skills and experience are even better Having passion when you’re new in business is very good because it gives you drive. But, expertise and experience are better because these are the qualities that will help you know which investment is good, who is a good person in the markets, which companies are well managed, and, therefore, make better investment decisions. Andrew’s takeaways Manage risk with diversification If you don’t want to lose everything at once, consider diversification and owning many different assets. Unfortunately, in Nigeria and many other countries, there aren’t a lot of stocks available for investment. Be careful when investing in banks Banks are very high risk, and you should tread carefully when investing in them. Banks are just an arm of the government, and the government can do anything they want with banks. So there are risks that come with investing in banks that you wouldn’t experience with a traditional company. Banks have a meager amount of capital compared to a normal company. A tiny mistake by a bank can cause a massive shakeup in the share price. Actionable advice Trust is key. You have to get your investor to believe you in your dealings with them, no matter how short term it seems. Documentation is also critical. Make sure you keep records of every single transaction. No. 1 goal for the next 12 months Oladipupo’s number one goal for the next 12 months is to return to the asset management world. He wants to get into impact investing. Parting words   “Be brave. It’s a new world we’re living in, and opportunities are all around us.” Oladipupo Ehindero   Connect with Oladipupo Ehindero LinkedIn Twitter Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Tom Libelt was born in Communist Poland and escaped to the US when he was 11 in the early ’90s. At 9, his father sold products at soccer stadiums in Eastern Europe, where he learned the hard way how to sell and how not to be hustled. He is hyper-focused on helping course creators market their online courses.   “Becoming a big fish in a smaller pond often is not only more profitable but will make your life easier.” Tom Libelt   Worst investment ever In his early 30s, Tom was running a reasonably successful SEO business. Back then, it was easy to rank on Google using what people today consider as blackhat methods. Tom would pay bloggers to get backlinks. Tom had a team of 14 writers at the time, spending a lot of time, money, and effort getting into these blogs. Their goal was to get 50 backlinks pointing to a website every month to keep it ranking higher. While he had other tactics, this model worked the best. Google gets smart After riding the wave for a long while, Google smartened up and was out for businesses doing shady stuff. Google destroyed almost all the blackhat networks. They looked at IP addresses and de-indexed them. Thousands of SEO companies were pretty much back to square one. Tom now had a massive team of writers with nowhere to put the blog posts. Trying option B Tom learned about Amazon Kindle (e-books) at around this time and decided to see if he could make a business out of it. He had a ready team of writers anyway. Tom told his team to pick topics of their choice, do keyword research and write up short books of about 30 to 40 pages, then use images to fill in some gaps and just publish them on Kindle. Competition at the time was little and so getting into Kindle was pretty easy. Striking gold About three months later, Tom’s writers broke even. So he thought this could work. Tom would now sit down with the team for two days, go over hundreds of topics and then pick the best to run with. Eventually, the team was pumping out about 250 books per month, and for about four or five years, the money coming in was quite good. Kindle shakes things up Making money on Kindle was pretty straightforward. You’d get 70% of sales made, and $1 for every book rented. Tom’s business was making a killing by pushing rentals. One day, out of the blues, Kindle killed the rental payment model. Now they would focus on pages read. Turning to blackhat tactics again After the new payment model, Tom turned to a blackhat marketing tactic where he told people in the introduction of the books to skip to the end to get the “Golden Nugget” and then come back to the beginning of the book. So everyone would just go straight up to the end of the book, and Tom would get paid. While this still got him money, it just wasn’t as lucrative. Closing the doors for good Tom’s marketing tactic worked for a while then one day, without any notice, his Kindle accounts got shut down. There was no explanation given, and he was not allowed to appeal the decision. Since Tom had no control over Kindle, there was nothing much he could do than accept the loss and move on. Tom had invested so much in the Kindle business just to have it go away overnight simply because his business model relied entirely on someone else’s business. Lessons learned Easy come, easy go Taking the easier way out may bear you fruit, but it won’t last long. You are better off working hard so that you can reap the fruits longer. Have control over your business Have your own business structure. Don’t depend on other people’s infrastructure. Always ask yourself where the control is? Who owns the control in the situation? If you don’t have control, then it’s not a good business idea. Andrew’s takeaways Build your own assets You have to build your assets instead of relying on others. It’s hard to do this, but it makes your business idea more solid. Know when you are riding a wave There are many ways to make money, and sometimes you will be taken advantage of, but always know when you’re riding a wave so that when it comes crashing, you’re not caught off guard. Actionable advice Keep your team small, if possible. Keep your schedule open because if you don’t have time to think and analyze your business, it won’t grow. Lastly, specialize. No. 1 goal for the next 12 months Tom’s number one goal for the next 12 months is to look at opportunities in the online course creation spaces so that he can diversify. For instance, he’s looking at how he can make more info products.   “The best opportunities are something that you either kind of figure out by yourself by looking at what’s working, or just kind of come to you during your thinking process.” Tom Libelt   Connect with Wilbert Tom Libelt LinkedIn Twitter Facebook Website Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr.Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Andrew Stotz: astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Michael Covel (2009) Trend Following, 5th Edition: How to Make a Fortune in Bull, Bear and Black Swan Markets