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Here’s Why Every Entrepreneur Should Study Psychology

Salespeople have used psychological principles to increase their sales, as well as customer satisfaction, for decades. 

Yet when it comes to entrepreneurs who want to build their businesses, they’re far more likely to pick up a book on product development or marketing than they are on psychology. But why aren’t more entrepreneurs including psychology in their research when it could significantly help their business?

One serial entrepreneur, Ryan Hornby (founder of a technology start-up, based in Belfast, Northern Ireland), is working to change this. He’s studied psychology extensively as he’s grown his businesses, which include IAM, a model and creative agency, Hornby Property Ltd., a property investment, development, and management company. He now also owns Ryan Hornby Consultancy. 

I spoke with Hornby recently about how understanding psychology can help other entrepreneurs as they’re starting, running, and growing their companies.  

Shama Hyder: Can you talk about the connection between psychology and building a business? How does psychology apply?

Ryan Hornby: “If you want to sell it, they have to feel it.” Modern psychological and behavioral science studies have made it abundantly clear: emotions and instincts drive our decisions. Although we consider ourselves to be rational beings, particularly in business, how we make our decisions—consciously or unconsciously—will often come down to how we feel. 

This is why the biggest companies on the planet pump billions of dollars into advertising campaigns that don’t necessarily showcase the full capability of their products. Instead, they focus on evoking emotion in their audience. 

Hyder: How can entrepreneurs in the early stages of development use psychological theories to help pull customers in?

Hornby: Imagine your brand is a car. In your business strategy, marketing is like the gas that goes into the car and business development is the location where you plan to take the car to sell it. Many businesses prioritize these things in the wrong order, they focus first on marketing (the “gas” that makes the brand go) and they negate the importance of the quality of their brand. Unless your car is prepped, primed, painted, and polished, you can put all the gas in the tank that you want, but nobody will turn their heads. 

In order to prep, prime, paint and polish our car, we must use psychology—start with Maslow’s Hierarchy of Needs—when building our brand strategy to ensure that each of our brand touchpoints speaks directly to the needs of our customers and clients.

Hyder: What advice do you have for people who want to become serial entrepreneurs? 

Hornby: Starting a business is like riding a lion. The most challenging part of being an entrepreneur is getting on the lion. I meet so many people who tell me about their business ideas and all their plans to become an entrepreneur, but few of these people have the courage to begin the process. I’m not telling you that it will be plain sailing from there on in, but I am telling you that the first step is the hardest part.

Here are three pieces of advice I’d give myself when I was starting my first venture:

1. Create a pitch deck, whether you’re pursuing investment or not.

Regardless of whether you’re pursuing investment or not, it’s imperative that you curate a business plan or a pitch deck, as it is only by doing so that you can truly begin to understand every nuance of your brand.

2. Find mentors, even if you’ve built businesses before. 

To put it simply, mentors have literally saved me years’ worth of mistakes. If you don’t know, you cannot grow, and sometimes, in order to know, we have to be told. 

3. Fire yourself.

The sooner you realize that you are not your business, that your customers or clients do not necessarily need you, and that there are people out there who are even better skilled than you are, the sooner your business will grow. A successful entrepreneur is a humble entrepreneur.

Understanding psychological principles can help you in every aspect of growing your business, from marketing and selling to leadership to know when your ego is getting in the way of progress. Every entrepreneur should gain a working knowledge of psychology if they want to take their companies—and themselves—to the next level.

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