What I Learned Losing $2 Millions Dollars (3 Best Lessons) | Multi-Millionaire Entrepreneur Dan Lok

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– Let’s bring on the man himself, looking dapper as ever,
again, Mr. Dan Lok. (audience clapping and cheering) – Thank you. Is my mic on? Okay, good. How was day one of Social Light? (audience cheering) Who’s your favorite speaker? – [Audience] You! – Ass kissing always works. It does work. Let me ask you a question. Now, yesterday in the morning,
I shared the seven lessons that learned building
my $10 million empire. It’s actually more than $10
million, but doesn’t matter. (audience laughs) Actually, who could summarize
the seven lessons for me? Who could do that? Who could do that? Yes, loud and clear. See if you can do that. – You mean the one percent? – No, no, no, the seven lessons. Who could summarize the seven lessons? Each one of them, each one of them. No, what’s the first one? – [Audience] Adversity profession. The second one. – [Woman Audience]
Money follows attention. – No, no. Who could do in order? Yes. – [Woman In Audience] Love what you do. – Yeah. – [Woman In Audience] The third one was visibility is more important than ability. Is that the fourth one? – That’s the fourth one. (audience shouting answers) Yeah, it’s number three. The business rule, good. Save yourself before you save the world. Good. (audience shouting answers) Good. – [Woman In Audience] Stop
pretending and start asking. – Yes. – [Woman In Audience] Master don’t gravel. – Yes. – [Woman In Audience] And,
don’t have to get it right. – Okay. Round of applause. (audience applauding) You get a book from me, so talk to me afterward. I’ll mail you one. Today, what I want to do is
maybe a little bit interactive because after these types of conferences– How many have been to
other conferences before? This is not the first
conference you’ve gone to. And, what happens is,
entrepreneurs, business owners, they attend different
conferences and then, they get all excited, all motivated, all psyched up and hyped up and then they go home and they what? Yes, and do nothing. All the self help becomes shelved help. (audience laughing) My goal for you is to make sure you actually take some action, get some ideas and some
strategies that you can do. Let’s see how much time we have,
go through a couple things, and maybe, if we have time,
we’ll do a little Q&A. Does that sound good? – Yep.
– Yeah? People who are not here,
they’re missing out. They’re missing out because the second day is all about implementation. It’s about what? – [Audience] Implementation. – So, yesterday, I shared
with you seven lessons, right? – [Audience] Yep. – Today, I’m going to give you three more. Three more. Lesson number one. Before I get into the
lesson, there’s this, yesterday I talked about attention, yes? So, attention’s the new currency. Money follows attention. Afterwards, a lot of people come up to me and they ask me different
questions about their business. The first lesson I want
to share with you is this. How many of you actually
don’t have a business now, but you kinda have an idea? Wow. Okay, wow, good. How do you know? People ask me, Dan, is my idea good? Is it viable? Should I do this and this and that? I always say, with me, any industry, any business I want to get in to, my first question is, first
of all, is there a demand? Not just because this is my fucking idea, is there a demand? Are people actually spending
money buying this thing? People come up to me and
pitch to me all the time with ideas, their investments. Oh, you know, Dan, nobody’s
ever done this before. Let me share my idea with you. And, I run. (audience laughing) Nobody’s ever done this before? I don’t want it. Oh, Dan, my tech. I’m going to be the new next Facebook. I run. No, I don’t want that. I look into an industry where there’s already existing demand. I don’t want to create demand. This is just my personal preference. There are people that make a
lot of money being a pioneer, but pioneers, usually they
have arrows in their back. Most of the money that I’ve
lost in my business career was because I was a pioneer,
trying to do something new. Nobody’s ever done this before. Let me prove to you
what I could do, right? Sure, I proved how stupid I was. So, I don’t like to do that. Any industry I look into,
I ask, is there a demand? Second question is, can I be
the number one or number two in that category? Can I be the number one or the number two? If there’s already a
number one and number two, well, can I aim to be that or
do they have any weaknesses or certain things
they’re not doing so well or can I create a category within that I could be number one or number two? So, let me give an example. How many of you have heard of a little drink called Coca Cola? Okay. How many have heard of Pepsi? Have you seen Pepsi blind tasting tests? Yes, and how they do
it, they blindfold you, and you drink, and seven out
of ten say Pepsi tastes what? – Better.
– Yeah. But, how come Coca Cola
always kicks there ass? Pepsi can never ever ever beat Coca Cola because Coca Cola is first. In any market place, better
to be first or different, but better to be first. You have that first in market advantage. So, lesson number one is you
want to dominate, not compete. Dominate, don’t compete. How many have heard of
the idea that competition is a good idea? Okay, it’s a fucking lie. (audience laughing) For who? For who? You think Apple competes or
do you think they dominate? – Dominate.
– They dominate. In any category, any industry leader, they are not competing, they
are crushing the competition. They don’t want to win by this much. They want to win by this much. By this much. So, any industry you get
into, you want to dominate. Don’t compete. If I look in an industry,
look in a business, if I cannot be number one,
can I at least be number two? If I’m number three and
four, I’m not interested. I’m not interested. One of the greatest business books, I believe that was ever written, and most people don’t think about it, is The Art of War by Sun Tzu. How many have read it? Yeah, The Art of War. A few years ago, I actually wrote a book called The Art of War
for the New Millennium. With The Art of War, one
of my favorite quotes is, a battle is won
before it is ever fought. Most businesses, the truth is, if you actually have done your research, most of them, you will know
if you’re going to succeed or fail before you even put in a dime. Most entrepreneurs,
they always have an idea and an idea ain’t worth shit. Ideas aren’t worth anything. It’s execution, it’s research, it’s everyone can come up with an idea, but one elegant idea is better
than 1000 semi-good ideas. One elegant idea. So, ideas are not worth a lot. It’s execution, it’s implementation. I’m not the most creative guy. I have never had an
original idea in my life. Don’t like them, don’t want them because when I go to the
bank or when I deposit money, the tellers not going to
ask me, you know, Dan, you should make this money
with your original ideas. No. She never asks me that. So, I am not an original thinker, I’m not interested in that. I’m a synthesizer. What I like to do is, I like
to take some best practices from different industries
and I connect them together. So, let’s say, traditionally,
I’m in this industry and everybody does some
things a certain way, right? Most of the time. And, I like to borrow some best practices from other industries. Oh, nobody’s ever done it this way. Well, let me do this. And then, people think,
oh, that’s a breakthrough. That’s so brilliant. What’s so brilliant about it? It’s not brilliant. They’ve been doing it for 20 years, but just from a different industry. So, one of the things
that I would suggest, read publications, magazines, blogs outside of your industry. That’s how you get out of the box idea. In my podcast, one time I was interviewing the founder of Priceline.com. How many have heard of Priceline.com. So, Jeff Hoffman. I was talking with Jeff
and through the podcast, Jeff was telling me how he
came up with the Priceline.com idea was one time he
was reading a magazine, some kind of article about fruit and how there’s a company,
basically, they sell fruit, but they do it in a way that, let’s say you have a banana and it’s fresh and it sells for X amount of dollars, but in time it goes bad, right? So, every day that goes by, this company, they would lower the amount of the price for these types of fruit. So, Jeff read the article and
that’s how he got the idea, how come we can’t do the same with hotel? What if hotels, there are a lot of vacancy and they’re just sitting there. It costs us money for
the cleaner to be there, it costs us money for
the air conditioning. What if we can work a deal with hotels and all the space that they don’t sell, we could sell on our website. That’s how he came up with Priceline.com. And you think, oh, such an original idea. Listen to the interview. It’s not that original, but that’s how you get breakthrough ideas. So, that’s lesson number one. Dominate, don’t compete. Second is verify, don’t assume. Verify, don’t assume. The number one key to business success is to avoid bad assumptions. It’s the number one key
to business success. Avoid bad assumptions. Most businesses fail
because the entrepreneur assumes it’s a good idea. They assume everybody would want this. They assume their marketing would work. Because entrepreneurs, we’re
naturally optimistic, yes? Yes, we look at the good side of things. Yes? How it’s going to work. I’m saying, and I was
very, very optimistic, and that’s how I lost
most of my money, okay? So, now I’m more of a realist. I’m more like a professor of harsh reality through that experience. So, now I am optimistic, but
at the same time, I verify. I ask myself the question,
what could go wrong? That’s a very good
question to ask yourself. What could go wrong? Not, what happens if
everything goes right? No, what could go wrong? Another very good question
I have on my desk. I have, what could go
wrong and what don’t I see? What don’t I see? What don’t I see? Oh, yeah, when I launch
this, my business, you know, I don’t have any business experience, I’ve got this great idea, I’m sure when I launch it in 30 days, I’m going to make $100,000. That’s an assumption. How do you know? What if it doesn’t? What if, not only it
doesn’t make $100,000, you didn’t make any money the first month? What if you didn’t make
any money the second month? What if, actually, you don’t
make any money the first year? What if you don’t make
any money the second year? Think about it. Think about it. Who has a higher probability of success? Two people. This person, saying, you know what? I’ve got this idea. I’m going to go to the marketplace and it’s going to be so easy. I’m going to launch and I’m
going to be profitable day one and people will love it and they will tell their friends about it. Once they see it, oh, my god, man, there will be a path to my door and I’ll be rich in one year. Better start looking at
a house and a new car. This entrepreneur, you know what? I’ve got this idea. I think it’s a decent
product, but I’m not so sure. I have some assumptions in my mind. Let me verify, who are the
competitors in the marketplace? How long have they been in there? What’s their profit margin? Are their products good? How big is their customer base? What about their growth? What about new threats? Can I make it cheaper? Can I actually make it cheaper? Let me talk to some vendors,
maybe from China, from India, see how much they can
manufacture there for. What exactly is my marketing cost? What’s my plan? What’s my strategy? What if that plan doesn’t work? What if I run out of money? Well, I better keep some savings. How long can I last? Do I have enough cash that can
last one year or two years? Who is going to more likely succeed? (audience calling out answers) This one is avoiding bad assumption, this one is in Disneyland. (audience laughing) Nothing wrong. I love Disney. Right? Fantasyland. This is entrepreneur. So, we’re optimistic,
but we want to verify. You want to challenge your idea, that’s why sometimes
people ask me questions like, Dan, you’re so
harsh, you’re so blunt. It’s not blunt. It’s just nobody’s asking
you these tough questions. All your friends are like, yes! Awesome! Go for it! And then, you say, oh, great,
let me stick my life savings into it and then, when
the product’s ready, you go to them and say,
would you like to buy some? No. (audience laughing) But, I thought you loved me idea. I love your idea. I support you, I love you, but I’m not going to buy. Shit! Why didn’t you tell me earlier? So, now, when I talk to people and say, oh, I love your idea. Okay, pull out your credit card. Let’s take your order. Would you buy some? Oh, no, I don’t want to buy some. Then, why did you say you love my idea? They didn’t like my idea. So, that’s what I mean. Verify, don’t assume. It’s because of bad
assumptions, so don’t assume. Verify your intel. Going back to The Art of
War, is intel, intelligence. Business is the intellectual sport. Business is a what? – [Audience] Intellectual sport. – It’s not about who has
the most amount of money. It’s who has the most money
intelligence, who has intel, who has access to information. That entrepreneur is going to win. Make sense? Okay, last lesson. Kinda ties in a little bit
what Mike was talking about and, actually, Mike, what he was sharing, it’s very valuable. I know the first thing,
you’re looking at numbers and all of that. I can see some of you
are texting on your thing and not paying attention. I was observing, ‘cuz it
wasn’t that interesting, but it’s actually damn important. Sometimes an entrepreneur,
the stuff they assume that you’re not interested, that’s the fucking thing you need because, as an entrepreneur, if you cannot read
financials, you’re fucked. (audience laughing) Let me explain. I’ve seen my friend’s
revenue every single year, it’s going up like that. Suddenly, the next year, they’re
out of business, bankrupt. I say, what the hell happened? They don’t read financials. They look at the revenue, oh, yeah, this year I’m making half a million, next year I’ll make a
million, there’s 1.5 million. Maybe hire more people. What they don’t notice
is revenue’s going up, profit is going what? – Down.
– Yeah. The only purpose of a
business is to provide you with a future stream of earning. So, our goal as an entrepreneur is to turn assets into revenue. Turn assets into what? – [Audience] Revenue. – And then, from revenue into profit. From revenue to what? Profit. And, from profit into cash. Cash. It’s cash flow management. No company goes out of
business because too much– it’s not revenue. Every single company goes out of business because they run out of cash. It’s cash. They can’t meet the payroll. They can’t pay for the lease. That’s what’s the problem. So, they look at, oh,
yeah, revenue is good. Even profit. Profit, it’s just a theory
because you can’t go to the bank and deposit some profit. They will look at profit as good, but exactly, at the end of the day, how much are you putting into your profit? How much cash do you have
in your bank account? That’s why most entrepreneurs, oh, yeah, I’ll make the money next
month and this and that. Look at their bank account,
they run out of cash. I’m paranoid about my companies. Paranoid. I want to have a lot of cash
in each of my companies. So, last lesson and that is, be somebody, be somewhere,
and do something. Be somebody, be somewhere,
and do something. Be somebody, meaning that,
yeah, you want to be perceived as the expert in your field. You want to be perceived as
the authority in your field. You want to be perceived
as the number one person in your field. Be somebody. How could you do that? What do experts do? They have what? What do they do? What do they do? What do they do? Come on, Rob, you know. (audience calling out answers) They teach, they educate, they have? They have a book. They speak, they publish,
they give interviews, yes? So, put on a different hat. So, if experts, they
write books, they speak, they publish, they teach. If I do these things, it makes me an? An expert. It’s not like they are an expert and then they do these things. No, you do these things,
then you are an expert. It’s chicken and egg. So, be somebody, be somewhere, meaning attending conferences,
meeting with people, connecting with people. Don’t just walk up to someone
and say, you know what? I’ve got this product. Hey, you know what, Joshua? Can I sell you some stuff? Not like that. I’m talking relationships, being somewhere and doing something. Doesn’t matter what it is, just a little bit of something every day. Most entrepreneurs, and
this is my last thought I want to leave you, is
that they get discouraged and they give up because,
again, they assume. They have this unrealistic expectation. Let me tell you a story, an analogy, then I’ll be out of here. Think of, again, two people
who want to lose weight. This person is saying, you know what? I want to look fit and before summer I want to get six pack abs, and I’m kinda single, you know. That motivation, yes. You’ve got to have a strong why. And, you know what? I’m going to go to the gym once a week and I’m going to do about
20 minutes of cardio and maybe a couple of crunches, then I’ll have six pack abs. That’s how most entrepreneurs think. Instead of having
unrealistic expectations. They say what? (audience calling out answers) What are the chances of this
guy getting six pack abs? On the other hand, this guy, you know what, I want to
get six pack abs as well and my instructor, my trainer,
said I’ve got to go in three times a week, I gotta watch my diet, I gotta do at least an hour of cardio and then, maybe 100
crunches every day, okay? But, you know what? Just in case, I’m going to go
to the gym five times a week, two hours a day, not 100 crunches, I’m going to do 200 crunches, plus, I’m going to do some
cardio on top of that. Let me run another two miles. Whatever activities you’re thinking that it takes to cut through the noise, whatever activities you think it takes to make that sell, to grow your company, whatever the amount you’re thinking, just ten X it. Just ten X it, then you
won’t get discouraged because now, your expectation
has been adjusted, then you don’t get discouraged. Maybe it doesn’t take ten times
the activities and effort, but I guarantee you if you
actually ten times your thinking and ten times your activities, your expectation, chance of
exceeding, it’s way higher. Does that make sense. Yes? That’s all I have. Thank you very much. (audience applauding)