This is part of an ongoing series of posts by our Entrepreneur in Residence, Kosta Ligris, focused on guidance for the student teams taking part in our MIT delta v accelerator.
noun: the act or fact of doing something that involves danger or risk in order to achieve a goal
//Starting a business always involves some risk-taking.
noun: a possibility of something happening; the occurrence and development of events in the absence of any obvious design
verb: to do something by accident or without design
People talk about taking calculated risks, often defined as a risk that can be estimated or limited in nature. The concept is a calculated risk can be made after processing information and making a determination that the risk is worth taking.
If only the real world would let me have multiple data points to process so I can calculate the risks for next steps to take in business (and in life). That’s not how it works in the real world!
Really it should be called an “educated risk.” Kinda like an educated guess, which is still a guess, isn’t it?
Apparently, there is evidence that fear causes people to overestimate risk, and the absence of fear, well, it causes you to underestimate risk. It’s all discussed in this quick Inc. read “What Successful People Know About Taking Calculated Risks.”
“Only those who will risk going too far can possibly find out how far it is possible to go.”
–- T.S. Eliot
I don’t know whether you can calculate or estimate a risk, after all, it is categorized as a risk for a reason. Sure, there are small risks, as well as risks that can be considered BIG. But ultimately you need to sometimes go out on a limb. You need to make a decision to do or not do something, and then brace for the consequences.
I do know from experience that risk-taking in business and entrepreneurship is standard operating procedure. You hold your breath, make a decision, and jump in. Some will be wins, some will be losses, but each one is a lesson. And therein lies the magic; act, learn, repeat. Don’t fool yourself into waiting for chances. It is much more courageous to take risks and learn from the outcome.
“People who don’t take risks generally make about two big mistakes a year. People who DO take risks generally make about two big mistakes a year.”
— Peter Drucker
The greatest stories are held within the scars of decisions gone bad, from risks that were perhaps calculated or estimated as dangerous. The greatest risk is not to try something, Jeff Bezos has been quoted as saying. “When you think about the things that you will regret when you’re 80, they’re almost always the things that you did not do. They’re acts of omission. Very rarely are you going to regret something that you did that failed and didn’t work or whatever.” Check out “Jeff Bezos: This is what you are going to regret at 80.”
“If things seem under control, you are just not going fast enough.”
-– Mario Andretti
So don’t be afraid of risks. Take risks, but don’t leave things to chance. There is a huge difference between risk-taking and leaving things to chance. Chances are things that happen without design, they just happen (or don’t). And what a boring way to live – waiting around for a chance that something may or may not happen. Check out “3 Things You May Not Have Heard About Taking Risks” and learn about Mark Zuckerberg’s $2 Billion investment in Oculus that didn’t pay off.
I’ve talked about the concept of “Get Comfortable Being Uncomfortable” back in June. This week I double down and urge you to face fear. I have heard some of you talk about the fear of standing on stage and pitching at Demo Day. Will you not pitch? Is that a risk worth taking? Are you going to leave all of your hard work and the hard work of your team to chance? Of course not; embrace the fear, embrace being outside of your comfort zone.
This week’s recommended TEDx Talk is ” Why you need to take more risk” by Steve Haley. Don’t fall into the trap of the comfort zone. Break out of your comfort zones using Steve’s five tips or take a risk and create your own tools to break out of the comfort zones because “that is where the magic happens.”
“Security is mostly a superstition. Life is either a daring adventure or nothing.”
-– Helen Keller