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The Dangerous Second Act

Randy (not his real name) and I were sitting in a coffee shop across the street from his office. As soon as we sat down to enjoy our overpriced lattes, I asked Randy why he asked for this meeting. He didn’t beat around the bush, “My exit from the tech company was way beyond my expectations, but I’m getting anxious to get back in the game. Do you know of any businesses that would appeal to me?”

I had heard rumors about the successful sale of Randy’s business (hey, in many ways Nashville is still a small town). I assumed Randy had a big pile of money to work with. But what I didn’t know until we met for coffee was just how mature Randy was, certainly more than you’d expect from a 32-year-old tech guru. As we discussed the kind of business that might appeal to him, Randy admitted he didn’t know everything about everything, and that he was willing to find something new and re-learn whatever he’d need to relearn to be successful. With an uncanny sense of wisdom he said, “What’s more dangerous? Not knowing what I don’t know, or thinking I know more than I know?”

Randy’s early career success has not turned him into a self-proclaimed business guru. Many business owners reach a level of success then begin to assume they know everything about everything, and that can come back to bite them when they take on a second business. I once knew a guy who made a bundle in a healthcare business who lost most of his wealth over five years in an overly ambitious real estate project. What did this healthcare guy know about real estate? From the looks of how it turned out, he knew nothing about real estate. This guy apparently assumed success in one business would translate into knowing what he needed to know about another business. Big mistake, expensive mistake.

That’s why I was so impressed with Randy’s grounded thinking. He recognized that his first business success didn’t make him some kind of Warren Buffett business genius. While anxious to reinvest part of his wealth in another business and get back in the game, Randy knew he was essentially starting over.

Success in business breeds a level of confidence that can translate into arrogance. The most personally secure successful business owners I know are the ones who can distinguish the “why” of their success, while understanding their success wasn’t simply due to their wisdom or skill. Those are the business owners with whom I love to work when it’s time to start the second act of their career.

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Tennessee Valley Group

Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."