5. Put 20% of your net asset value at risk. Scale and grow, or fail, and fail fast.
Murray Legg, co-founder of Retroviral and Webfluential (digital and social media agencies): Entrepreneurs usually start working on launching their own business before they leave the support and financial stability of an existing job. Being willing and able to risk losing a significant portion of your net wealth is important when making the decision to become a digital (or any type of) entrepreneur for two reasons.
Firstly, the enormity of the task that they have undertaken – to build a new business – must be scary enough to keep someone focused on their objective 24/7, working hard living their dream all day, and up at night keeping on top of how they’re going to make it a success. It’s putting their skin in the game with nothing held back that puts the business on the map of their personal wealth portfolio, and that will make the returns significant enough to justify having left their secure job in the first place.
Secondly, digital is a fast moving industry where businesses must scale and grow, or fail, and fail fast. Entrepreneurs should be prepared to spend on marketing and systems and hire people to help them build the business – they cannot do everything by themselves.