How to put skin in the game in business and life? Tips for taking calculated risks
Skin in the game is a phrase made popular by the renowned investor Warren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.
In the very first investment fund he set up, he raised $105,000 ( when that was a lot of money ) from 11 doctors. As a token personal investment he put in $100 to give himself credibility, build confidence and trust, and as an incentive for himself.
The adage is frequently used in politics as well as in business, banking, and gambling.
The phrase originated in conversation by race horse owners in the southern USA. The skin was their horse or investment and the game was the annual gee-gee racing derby.
P.S: This post is inspired by one of my friends & Mentors in the game, Josh Cousins on lessons learned generating over $1M for his business at 22 (with affiliate marketing & coaching).
How making a small commitment can lead to big results
1. Use skin in the game to increase your chances of success:
By taking Risks - calculated risks.
When we put skin in the game in any endeavour, we show that we are committed to our goals and are willing to risk something important to achieve them.
Starting out- you may have to invest every single penny back into the business and your education to develop thick skin.
"I came to a point where I was fed up and decided to go all-in, invested literally everything I had into the business into a set of skills, fast forward another 2 years, things started to pay off."
2. The downside of not putting skin in the game:
Avoiding risk can lead to missed opportunities and failure.
You take more ownership of something when you have some skin in the game.
It takes dropping everything that is holding your back include self-doubt and limiting beliefs.
3. Skin in the game fosters Consistency
To get real skin in the game, figure out what you're good at, double down on it, and stick to it
Your first task is to pick a niche and stick to it.
How do you pick a niche? By doing your Research and staying consistent.
E.g. in writing, you need to put in the reps. 40 -50 posts and you'll gain clarity to what you like.
Its important to bounce around to figure out what you like, but equally as important to stick to something.
Master patience and wait 3-5 years for this to happen.
4. Use skin in the game to get out of your comfort zone
Sometimes the best way to learn and grow is by putting yourself in uncomfortable situations.
When we put skin in the game, we force ourselves to step outside of our comfort zones and face our fears.
To have "skin in the game" is to have incurred risk (monetary or otherwise) by being involved in achieving a goal.
You might need to test your systems and models on your initial clients in exchange for testimonials or charging the bare minimum.
5. Surround yourself with people smarter people
This includes Coaching and taking courses.
One of the most effective ways to grow in your business and self-development is investing money and time in people ahead of you in the game.
It doesn't only help in accelerate your learning and implementation at a fast rate, but also builds connections with these individuals
6. Use skin in the game as a form of self-care:
The biggest game you play is …. the game of life.
How big a risk are you taking with yourself ?
Putting skin in the game can be a way of showing ourselves that we are worth investing in. When we take care of ourselves by taking calculated risks.
7. Skin in the game helps you stand out
Results differentiate people into high performers and the rest
Typically 80/20 rule - the significant majority of people are amongst the rest while 20% stand out.
And in reality, real competition becomes a hell of a lot smaller.
The goal is to Refine your frameworks and systems and turn them into a fully-fledged business that rakes in 6 figures a year plus.
8. Attract your Ideal Clients
Because most people are mediocre in what they do.
Once people sense your level of mastery as one who has skin in the game they tend to be the ones looking for you and sending customers to you.
The key is to create frameworks and systems to get people to come to you.
Then Refining the frameworks and systems and turning them into a real business that generates high-income a year.
"I got really good at creating frameworks and systems to get people to come to ME instead of the other way around."
9. Enjoy the Process
𝐄𝐯𝐞𝐫𝐲 𝐦𝐨𝐦𝐞𝐧𝐭, 𝐞𝐯𝐞𝐫𝐲 𝐦𝐞𝐦𝐨𝐫𝐲, 𝐞𝐯𝐞𝐫𝐲 𝐦𝐢𝐥𝐞𝐬𝐭𝐨𝐧𝐞 𝐝𝐞𝐟𝐢𝐧𝐞𝐬 𝐮𝐬.
So take the time and enjoy the process while making progress.