Confidence in your ideas is essential for business success, but overconfidence can be fatal.
Maintaining the right level of confidence is a constant challenge as it changes with each success and failure. This article discusses the benefits of confidence and the risks of overconfidence, according to entrepreneur and investor Alejandro Betancourt.
Background
Betancourt began his business career in Venezuela in the early 2000’s. His first job included a management role in BGB Energy and Commodity Trader Gurusega. He was also the Commercial Manager at a Latin American branch of the ICC-OOC, which provides technical solutions for offshore drilling. Betancourt later established the O’Hara administration to manage international resources in various industries, including its own investments. Since then, Betancourt has focused on investments that he often supports by taking leadership roles in those companies.
Philosophy
Betancourt’s philosophy on overconfidence is based on the idea that your level of confidence reflects your recent results. With this perspective, often winning can be risky because you can begin to believe that your success will continue unabated. You can never be wrong This thinking prevents you from thinking analytically about possible future results because you do not expect to change anything.
However, no one can win all the time, because today’s markets tend to be extremely volatile. As Betancourt puts it, “You lose the ability to make accurate predictions because you expect everything to happen the same way and then you become overconfident and this is a big mistake.” This type of overconfidence occurs in all entrepreneurs, especially when they are young. However, this prevents them from making multiple contingency plans, which is essential in business.
It’s out of balance
According to Betancourt, humility is one of the most common mistakes made by company founders who fail to strike a balance of confidence. These two qualities are closely related, one of which necessarily decreases with the other, and entrepreneurs often find that they rely heavily on one of them as they move their business forward. Balancing self-confidence with humility is a constant process, because different situations require different characteristics.
Confidence is especially important when starting a business because you had the idea in the beginning. You have to believe passionately that the solution to your problem is the next big thing. However, overconfidence in an entrepreneur creates a high risk for a business as it matures. For one thing, it may make others believe that you are arrogant, which adversely affects interpersonal relationships which is crucial for the growth of a business. Misconceptions can also cloud the analysis of your perspective, making it difficult to bring that idea to life. Understanding your small place in the world requires a healthy dose of humility, but too much of it hinders your initiative.
Hawkers
Hawkers have sold millions of sunglasses at high profits, but the source is quite humble. Much of its success comes from founders who have a good idea, as well as knowing that they need help getting their business off the ground. The four friends founded the company in Spain in 2013 and started selling Knockround Sunglasses, bought with an initial investment of $ 300. In four years, their annual sales have reached 60 million.
Despite these successes, the growth of hawkers was severely limited due to lack of capital. The founders had earlier started another business which failed for this reason, so they knew they needed funds to expand to markets outside of Spain. Although they relied on their business model, they were humbled to know that an experienced investor would be needed to achieve this goal.
They approached the Betancourt for financial management of the hawkers without hindering the growth of the company. One of his first tasks was to organize a round of Series A funding that raised € 50 million by October 2016. The following month, the Hawkers founders proposed the company’s Betancourt presidency, which he accepted. Betancourt remains president of the Hawkers until 2022.
Summary
Entrepreneurs need an abundance of confidence because they do not have security. While they must take risks as a routine practice, it is also essential for them to seek the help of qualified experts. Betancourt, with its financial support and personal skills, is very experienced in guiding struggling companies.
