I think there has been somewhat of a misunderstanding with entrepreneurs and the outside world. Starting and growing a business is what most would label as too risky.
Risk
My issue is, the more that I get to know and meet successful entrepreneurs the less I know them as “risk-takers”. Far from it, especially if that entrepreneur is raising money. Not just raising money but is good at raising money and has a product or service that is worthy of money. Having had firsthand experience in raising $600M over 2 years from more than a dozen investors the one thing that was out of the equation was the risk. Investors and professional entrepreneurs alike are expert risk mitigators. Mitigators isn’t really a word – I need to make something up because I needed to describe the killing of risk as an action because that’s what a good entrepreneur does. Any opportunity to kill risk they will do it. The more successful an entrepreneur the more they will hunt risk and take it down. Killing risk is one of those things that grows with an entrepreneur.
If you buy into this, you can understand why being labeled as a “risk taker” for an entrepreneur is false. Why does the outside or work-a-day world consider starting a company a risky venture? The landscape of the entreprenerial scene is littered with botched attempts of businesses or people know a family member that has lost their savings in a ill faded franchise. These things happen all the time, but I do contend if those folks really knew what it meant to be an entrepreneur, most of them would have never started those businesses, which is an example of risk mediation or for those that did start those businesses they would have been successful.
Consider this too… I think it is much riskier to work for a large corporation and make a big salary. I have known plenty of people when the large corporation’s profits fell they were the first one to be without a job, and the prospects of them landing a job, position and salary like they had were zero.
Uncertainty?
I don’t blame anyone for taking a paycheck and providing from their families. I don’t fault or look down on anyone that wants routine in their work life. More than once, more like hundreds of times, I have envied those folks, but knew that I couldn’t do what they do… The thing that people see in entrepreneurs that looks and feel like risk… isn’t risk at all… entrepreneurs are good at managing uncertainty. The notion that there is no routine or set plan that they don’t make. Money doesn’t come from a budget, plans are not set in stone and if you are looking for a procedure you better keep looking. The entrepreneur’s daily (including the weekends) lives are riddled with one uncertainty after another. From product or service changes, additions, hiring decision, cash flow, expansion, growth, time off, marketing, sales, customer issues… everything. If you are lucky as an entrepreneur you will have grown your business in a way that will give you data to make decisions but most of the time, even with data it comes down to a gut feel. That can be too much for some people because they aren’t confident enough to decide.
Don’t Risk
Taking an unneeded risk isn’t smart. At any point in your life if you have an opportunity to eliminate the risk… do it! If you can’t and you need to decide, get wise council and eventually go with your gut, but don’t call it a failure if it doesn’t work. Recognize that you discovered a way that didn’t work and believe me you won’t forget it, and my hope for you, is you don’t make that mistake again which I am happy to say is experience, the entrepreneur’s greatest assets.
About The Author:
Christopher Elmore has written 8 books, countless articles, lectures at UNC – Charlotte and Queen’s University as well as travels the country speaking on on the topics of startup success, sales, presentation skills, change, entrepreneurship, accounts payable and payment automation. Having deep startup and entrepreneurial experience, Christopher was one of the six people that started AvidXchange in 2000 and continues to work in the business today. If you hire Christopher to speak or teach at your company or event… you won’t be sorry! Request a media kit or contact us for more information.
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I like how your article compare risk and uncertainty. Entrepreneurs must definitely be risk avoider. It is important to calculate and minimise it to give insurance to the project. On the other hand, uncertainty is undefined but will happen in the lifetime of the project. Entrepreneurs must embrace it and respond to it in the most efficient and benefits way. Uncertainty can be very positive for the project because it opens gates and horizons.
I like how you compared an entrepreneur to an everyday employee. The biggest risk in my eyes as an entrepreneur is not knowing where your next check is coming from. As we all know, with high risk comes high rewards.
In the past, I was taught that you need to be a risk taker, in order to become an entrepreneur, which was really confusing to me. I never liked taking a risk, I much rather prepare for information and eliminate the risk. Therefore, the fact that successful entrepreneurs take “Any opportunity to kill risk they will do it.”, really does make sense and is in many forms a natural understanding. Why should you be risky, if you can eliminate the risk? In this case, uncertainty comes into play, which is an important aspect of being an entrepreneur, however, not everyone is born to deal with uncertainty in life.