Be a Negative Optimist

The most important quality for success in entrepreneurship and in life is the quality of optimism. Optimists have an unrealistic expectation of success. As a result, they're willing to try far more things without becoming discouraged. In addition, because of their unrealistically positive attitude, they're willing to persist much longer than the average person. Optimism is a wonderful quality-as long as you have it under control.

In order to be successful in business, and in any activity where your money's involved, you must temper your optimism with negativism. You must be enthusiastic about the possible upside of the investment, but you must be skeptical, critical, suspicious and demanding about all the different ways that your money can be lost.

Seek out and listen carefully to people who are negative towards your idea. Look for negative thinkers, because their viewpoints can be invaluable and save you a fortune in time and money. I have a friend who's a lawyer, and he gives advice to many people on investments. When someone comes to him and asks him about making an investment he's unsure about, what he does is this: He says, "All right, I want you to come to my office and I want you to sit behind my desk. Then I'm going to come in and present this investment to you, and I want you to critique this investment as if you were me."

And he says that when his clients begin critiquing the investments they're thinking about going into, when they start to become negative thinkers about the investments, he says they're astonished at how bad the investments really are. He said he's saved his clients millions of dollars by forcing them to be negative thinkers about their own ideas, simply by switching roles and sitting in front of the desk while they sit behind it. It pays to act as your own negative thinker.

Conversely, don't be overly influenced by negative thinkers. Just take their viewpoints into consideration. There's a famous story of Mary Hudson, who started off with $200 in the middle of the Depression and leased a gas station that two men had gone broke running at two different occasions. And from that location, she built a company called Hudson Oil, which is now the biggest independent distributor of gas and oil in the United States. From a $200 investment, even though everybody told her she'd fail. So remember, listen to negative thinkers, seriously consider what they have to say, but don't necessarily accept their advice.