realism, pessimism, optimism, where do you stand

Summary

Jim Collins wrote about the Stockdale paradox in Good to Great. James Stockdale was a POW for seven years in Vietnam. he said the optimists were the first to die. they kept saying “we’ll be out by Christmas.” Christmas would pass and they’d die of a broken heart. the survivors held two beliefs at once.

1. unshakeable faith that you will prevail in the end. not might, will. you don’t entertain the alternative.

2. brutal acknowledgement of the current facts of your situation. not the version you wish were true. the actual one. the math, the runway, the cash, the loss.

most entrepreneurs lean blind optimist. “things will work out.” they don’t look at the bank account because the bank account would say otherwise. then they’re shocked when it ends.

I built two businesses while sitting in $100K of debt for years. I knew the number. I tracked it monthly. I also knew I would get out of it, no question. both at the same time. that is the only mindset that works. try harder.

Transcript

introduction to the podcast and discussion on the spectrum of optimism, realism, and pessimism

The most impactful business is the business that genuinely improves another human, a better human business. And to grow a business like this, you have to continually improve yourself. This podcast is a documentation of that thesis, scaling businesses and also personal growth. My goal is for you to shortcut this journey.

So if you’re ready to try hard, subscribe. If you like what you’re hearing, please share and enjoy. So where do you land on the spectrum of optimism, realism, pessimism? Where do you fit in that category? Which one do you consider yourself, optimist, realist, pessimist, and be honest. This is the better human business podcast.

I’m Jerred Moon, and I was having a conversation with an entrepreneur and we were talking about mindset. And obviously it’s something I really like to talk about with entrepreneurs because as we know, mindset is everything. Whether or not you can achieve your goals has to do with your mindset. And it can be really easy to get in these negative loops as an entrepreneur or as a high achiever.

the impact of mindset on achieving entrepreneurial goals

It can be very easy to be a little too hard on ourselves and not know where to draw the line. There’s a certain part of you that doesn’t want to accept a lesser standard, right? So you’re going to be hard on yourself to get better. But then there’s the other side of you that’s like, hey, let’s have a little grace here and not be so hard on ourselves.

And then this translates over to whether or not you end up being an optimist or a pessimist or realist in your business when things aren’t going as well as you would hope or you’re running into challenges. And so I thought I could provide some guidance because this is what I told to the entrepreneur who felt like they were, they struggled with pessimism, just always thinking bad things are going to happen.

It’s not going to work out. But then they went the opposite direction and they went this like blind optimistic route of where people think that this like woo mindset should be, is that it should just be like, hey, everything’s always going to work out. All you have to do is think positive thoughts and everything’s going to be perfect.

introduction to the stockdale paradox and its relevance to entrepreneurs

That’s it. But that’s not really the truth either. And then there are the people who call themselves a realist. But to be honest, a realist most of the time is just a pessimist, or at least that’s what I’ve seen in my example. So where can we land? Well, if you’ve read the book Good to Great by Jim Collins, he talks about this perfectly.

And one, I highly recommend the book if you have not read it. So go read Good to Great by Jim Collins. But he talks about the Stockdale paradox. And so this Stockdale paradox is a concept that was named after Admiral James Stockdale. So he was a Navy officer who was a prisoner of war in Vietnam for over seven years.

He was in the Hanoi Hilton. And he talks about James Stockdale, Admiral Stockdale talks about the people who wouldn’t make it because they didn’t have enough hope. They were too pessimistic. But then. The other people who wouldn’t make it were the people who were overly optimistic because they’d expect something like, hey, we’re going to be out of this prison prisoner of war camp by Christmas.

explanation of unwavering faith and confronting brutal facts within the paradox

Everything is going to be fine. And you’re just lying to yourself, right? Everything’s going to be fine. We’re going to be out by Christmas. Then Christmas rolls around. It’s February. It’s March. And then you’re like, oh, wow. Like, where what is that optimism even doing for me? Because it’s really just me lying to myself.

And this Stockdale paradox. Really tries to train people to be in the middle. And this is ultimately my recommendation. So it goes over two different categories here. The first is unwavering faith. So you need unwavering faith that, you know, maintaining absolute faith that you will prevail in the end, regardless of the difficulties.

So this is more like big picture. If you are an entrepreneur or a high achiever, you have to know, you have to believe that, I will be successful. This isn’t lying to yourself. This is a determination. This is almost a goal. It’s an ambition. I will be successful. I will have a business that is X size, making X amount of revenue with X amount of employees.

personal anecdote about managing debt and how it shaped my understanding of mindset

Whatever that vision is for you, whatever truth you want it to be. This is casting that vision, but it is unwavering faith that you will get there. You do need that. You have to believe that. If you think of any professional athlete out there who’s achieved great things, they have this unwavering faith.

I’m going to be the best. But they don’t just think it right. They have to go put in the work. They have to go do the training every single day. They have to put in the reps. They have to put in the practice. So they need to do the things, but they have that unwavering faith. That’s part one. You need that big picture unwavering faith that I will achieve what I’m after.

But you also have to confront the brutal facts that are in your face. You have to have the discipline to confront the most brutal facts of your current reality. Whatever that reality may be. So strategically, big picture, we have unwavering faith that we will succeed. But tactically, at the day-to-day level, we’re going to be real about the brutal facts that are facing our business.

conclusion on balancing optimism with realism and its benefits

Lead flow is not where we want. I’m not converting how I want. I’m not leading how I should lead. It’s not this optimism at a tactical level where you’re just like, yeah, I’m sure everything will work out. Things will be fine. That’s not helpful optimism. That’s laziness. That’s brushing off the truth so you don’t have to face it.

That’s running away from reality. You have to confront the brutal facts. So there’s nothing wrong with kind of landing in the middle between this pessimism and optimism. And I don’t call it realism. It’s just more in the middle. It’s like, hey, I’m going to be successful, but right now this is a problem and it needs my attention.

That’s where you need to land. It’s not, again, it’s not this like, I see it all the time in the mindset world where the people are just like, the whole thing can grow rich. To some degree, yes, that can be helpful. You need to have the right mindset. You need to be thinking positively that you will achieve it.

But it doesn’t mean you turn a blind eye to things that are actually happening. Okay. You have to stay focused, confront the brutal facts. You land in the middle here. And when you do that, you are taking a combination of this absolute faith, like, hey, I will soldier on. This is just another challenge that I need to get through, but we will get there.

I will get to the end goal. So make sure what the end goal is and what you’re after. So you can have that unwavering faith. So when times get hard, hey, this is just a hiccup. Like, I’ll never forget when Emily and I were first married, we were in a lot of debt and it came out to be $100,000 of debt and we were making very little money.

It was like the minimum debt payments for what I was making. We got married for $100,000 that I think it was over half of our income just to make the minimum payments. But I remember sitting there and thinking, wow, this is going to be such a great story one day that I can tell my kids that we got out of debt and we started in all this debt.

And that’s, that is the mindset I unknowingly had. If you think about it, it’s like, okay, legitimately I’m in $100,000 in debt. It sucks. It’s over 50% of my take home pay just to meet the minimum debt payments. That sucks. Be very difficult for my family. Like I confronted the brutal facts of what it meant to be in debt, but ultimately I didn’t sit and stew in negativity because I knew I was like, hey, yeah, this, this sucks.

It’s not fun, but this is going to be a good story one day when I pay all this debt off. So you see how you can do both. You can be like, hey, this is the reality of the situation, but one day it’s going to be awesome. And that’s what you have to do. And if you don’t know the full story, yes, we did pay off all that debt and a couple years and maintain that debt free from, from the, that kind of debt.

So anyway, you need to know how to approach mindset because it’s not a, I talk a lot about listening to meditations at night and all these crazy things I’ve done, but that’s to get away from my scarcity mindset. But one thing I don’t do is ignore problems and just pretend like everything’s always going to work out.

Because if you don’t put in the work, things aren’t going to work out. If you don’t face the facts, things aren’t going to work out. They’re actually just going to get worse when you don’t face them, when you don’t turn over that rock and see what’s underneath it, they only get worse. So if you want to have an awesome mindset where you are balancing between unwavering faith and confronting the brutal facts, well, you’re just going to have to try harder.