People think they need to take risks left and right or bet the farm on things all the time…since isn’t that what start-up entrepreneurship is all about? No. Much of operating in a bootstrapped environment is mitigating risk, weighing costs and benefits, and acting judiciously (but quickly). Sure, there are times when taking a big risk is necessary, and there are many examples of people who look back with regret at not taking the big bet that panned out beautifully. These examples are in the minority.
What do you think?
Joseph on December 8th, 2005 at 9:10 am
Of course “risk” should not be mixed up with “chance”. It is not the same business, Game and Entrepreneurship, good entrepreneurs can revelead as poor players. But the comparison can be made to realise that it is not just all about risk.
Adult ADD and Money on December 8th, 2005 at 10:02 am
Did we learn nothing from the dot.com era. A lot of those ventures had so many high risk choices that most of them were doomed to failure.
“put all your eggs in one basket, and watch that basket”
Andrew Carnegie
Tim on December 8th, 2005 at 1:12 pm
The man, who don’t take risks, doesn’t drink shampagne…
Jason on December 9th, 2005 at 5:36 am
I agree with Ben that we should not find the risk and jump for it just to call ourselves entrepreneurs. I would say, however, that what you are doing in a “bootstrapped” environment is calculated risk. It doesn’t matter how much passion and drive you have. Putting up your money — or other people’s money for that matter — is risk. Business is risk. I think the true player sees it this way and knows how to mitigate the outragous and go with the calculated.
~~be bold
Eric Sohn on December 10th, 2005 at 7:05 pm
Entrepreneurship = risk. Now, is it necessarily Risk - or just risk? Depends on how you define entrepreneurship.
Deciding to own a McDonald’s makes you an entrepreneur - and involves risk of all sorts. Is it what Ben’s talking about? Doubt it.
I think it is accurate, though, to say that you don’t, for the most part, have to place big bets on big unknowns. Relatively small investments in market research and business planning mitigates and minimizes much risk.
The comment about Web 1.0 was right on - people thought there was no risk as long as you said “sell” and “Internet” in the same paragraph in the business plan. While you can rarely take the time to fill in all the blanks, you can usually do a certain level of due diligence that can give you an idea of how far to proceed, if at all.
I, of course, learned this the hard way when starting my coaching business - just spent, spent, spent…and didn’t plan. Others were successful - why not me? If I had done a modicum of introspection, I would saved a wad o’ dough, and grief.