February 26, 2012

Entrepreneurial Success Using The Marshmallow Test

Are you cut out to be an entrepreneur? Can you wait for your marshmallow?

There is a tremendous amount of research on the links among success, character and the ability to sacrifice. It all reaches the same conclusion: People who cannot defer current gratification tend to fail, and sacrifice itself is part of entrepreneurial success.
In one famous study from 1972, Stanford psychologist Walter Mischel concocted an ingenious experiment involving young children and a bag of marshmallows. He put a marshmallow on the table and told each child that if he (or she) could wait 15 minutes to eat it, he would get a second one as a reward. 
About two-thirds of the kids failed the experiment. Some gave in immediately and gobbled up the marshmallow; videotape shows others in agony, trying to discipline themselves - some even banging their little heads on the table. 
But the most interesting results from the study came years later. Researchers followed up on the children to see how their lives were turning out. The kids who didn't take the marshmallow had average SAT scores of 210 points higher than the kids who ate it immediately. They were less likely to drop out of college, made far more money, were less likely to go to jail, and suffered from fewer drug and alcohol problems.
But the evidence goes beyond a finding that people who can defer gratification tend to turn out well in general.
When we hear about successful entrepreneurs, it is always as if they had a Midas touch. A pimply college kid cooks up an internet company during a boring lecture at Harvard, and before lunch he's a billionaire. In real life, that's not how it works. Northwestern University Professor Steven Rogers has shown that the average entrepreneur fails about four times before succeeding.
When asked about their ultimate success, entrepreneurs often talk instead about the importance of their hardships; early failures and bankruptcies, missed Little-League games, endless nights without sleep. They talk about almost losing their home and the strain all this put on their marriage. When asked the legendary investment company founder Charles Schwab about the success of the $15 billion corporation that bears his name, he told me the story about taking out a second mortgage on his home just to make payroll in the early years.
Why this emphasis on the struggle? Entrepreneurs know that when they sacrifice, they are learning and improving, exactly what they need to do to earn success through their merits. Every sacrifice and deferred gratification makes them wiser and better, showing them that they're not getting anything free. When success ultimately comes, they wouldn't trade away the earlier days for anything, even if they felt wretched at the time." 
                                                                         --- By Arthur C. Brooks, WSJ February 24th


Luckily for us in Market America, we do not need to make any such heart-breaking, family-breaking, desperate sacrifices. Someone had blazed a vast trail - so that the only thing we need to do, is follow their formula to success. All we need is some sweat equity and follow their steps laid out in plain English. If we diligently follow them, in 2 or 3 years, we will be on our way to financial and time freedom, most people can only dream about.

Can you defer eating your marshmallow?

Much Success to you!

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