My 19 years in Tiger 21 has made one thing clear to me: entrepreneurs and investors are different kinds of people, inside and out. This is an insight that entrepreneurs can benefit from, particularly when they are contemplating selling a business. As David Russell, the self-described risk-aholic we met in Lesson 15, says about his fellow entrepreneurs: “Almost always, the way they got rich does not give them any skill set for being an investor. Basically, once they sell their business and have a lot of money, they are liquid and a danger to themselves.”1
Similar sentiments are echoed in Originals, a recent book by the organizational psychologist Adam Grant. “The more successful people have been in the past, the worse they perform when they enter a new environment. They become overconfident, and they’re less likely to seek critical feedback.”2
While Grant was writing about airline and transportation executives, I think his observations generally apply to many successful entrepreneurs, especially those whose success is very deep and very narrow. It’s hard to understand how limited your great skills are when they’ve brought you a really big success.
When David joined Tiger 21’s first group in 1998, he was one of six entrepreneurs who had already sold their businesses. Group 1 soon added some equally successful investors so that we could get truly independent perspectives on managing our money from disinterested peers ...