It takes confidence to launch your own business, but overconfidence can be a recipe for failure. That's why Alexa von Tobel warns not to get too caught up in your own success.
The 39-year-old founder of online financial advisor LearnVest tells CNBC Make It there's one thing people who launch flourishing businesses never do, if they want their success to continue: "No good entrepreneur ever really is like, '[Everything] is awesome,'" von Tobel says. "You're always in a good state of very healthy paranoia."
When von Tobel dropped out of Harvard to launch LearnVest in the wake of the 2008 financial crisis, she never allowed the company's initial success to go to her head. No matter how good you think your business idea is, executing it successfully is "really hard," she says, and even positive early returns can quickly vanish if you let down your guard and fail to capitalize on that momentum.
"So there was never a day where I was like, 'Wow, this is working,'" she says.
That was even true when LearnVest launched online and "literally thousands and thousands of people showed up" on the first day, causing the website to crash temporarily, von Tobel says. People were clearly excited about the business, and von Tobel knew she'd "hit [on] something" with the idea.
Still, she didn't let herself get swept away.
"I didn't ever go to bed at night and say, 'Wow, this is gonna work,'" she adds. "I was like, 'OK, this is a sign of something that could work' — that was more of the feeling."
Overconfidence is more prevalent among entrepreneurs than the average person, research shows — which isn't surprising, considering the long odds any new business faces to succeed in the long term. That same overconfidence can cause companies to fail, especially from big, risky bets that founders and CEOs can make, which can go wildly wrong.
As a first-time entrepreneur, von Tobel didn't get carried away with her company's early success. She plotted a path of manageable growth that helped the company top 1.5 million users within seven years of launching, at which point she sold LearnVest to Northwestern Mutual for a reported $375 million in 2015.Â
Making sure you retain some "healthy paranoia" doesn't mean you have to live in constant fear of failure, von Tobel notes, or be afraid of celebrating wins, in order to be successful. Instead, the trick is to work hard and avoid the sort of overconfidence that can lead to making major mistakes.
"I wish someone would have said this to me: 'If you're a really hard-working human, who shows up every day and makes good, sensible, thoughtful, smart decisions every day, and [if] you do it for a decade, you'll build something of real success,'" she says.
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