It's Okay to Take Risks

It's Okay to Take Risks
Photo by Benjamin Davies / Unsplash

Only the lazy did not say that no risk — no reward. Is this really so, and to what extent is this principle applicable in startup activities? Of course, before deciding to gain or lose everything, an entrepreneur should weigh the pros and cons of any desperate decisions. But it is worth stating that a startup founder can rightfully be considered a risky person who agreed to get involved in an adventure with no guarantee for success.

Risking: what is good about that, and what is bad

There are several benefits to risky decisions.

First of all, for a businessman, any risk is akin to the opportunity to look at the situation from the outside, to see beyond the usual framework and outside the box. Hence, – more creative and sophisticated solutions in crisis situations. When you are balancing on edge, you usually try to grab a tighter grip and tie not just an ordinary knot, but at least Hunter's knot.

Risks teach us to believe. It is like with aerophobia: a person is terribly afraid to fly, but they cannot influence their fear and, most importantly, a soft landing in any way – the only thing that they have is faith. So it is in business: risking a successful landing, you have to rely on your own luck. Just do not put all the responsibility on that luck: God helps those who help themselves.

Risks enrich the experience. Any outcome – negative or positive – complements the entrepreneur's personal background and makes up for a whole picture. Is it worth remembering how many bumps you stuff on this way at the earliest stages of the startup project? But then there will be something to tell grandchildren and young adherents in a startup get-together.

However, you have to be careful: the main side effect of risks that have not played is total apathy towards what is happening. Having received a negative experience, a person drops his hands, huddles in a corner, and drowns themselves in fear of all these 'what if that repeats' and 'if it goes like then'. As a result, the project is marking time or even gets completely closed.

When is it appropriate/inappropriate to take risks

In terms of making risky decisions, I believe there are only two cases when it is worth holding back: you cannot take risks with the client, and you cannot take risks with the law. And if in the latter case you can get off with a slight shock and pay a fine or some other sanction verdict from the state, then the first case promises a loss of audience.

Admit that it is a shame when you have been building up the customer base for three years and destroy it with lightning speed with one thoughtless decision.

In order not to mess up on these two parameters, I recommend that you discuss all the ideas with the legal department and lay customer-oriented policy at the heart of the company's philosophy.

Is it possible to take risks when working with an investor? I think so, but within the bounds of decency and not with their money. Experience shows that investors do not like boring people, preferring to deal with adventurers (of course, in reasonable measures) who can explain a particular decision with adequate arguments. Therefore, before you start playing the cowboy, you should do a little research to collect data and provide it to the investor.

By the way, to assess the potential risk, you can use the Delphi method. This method has proven to be one of the most affordable ways to reach a consensus on issues that you have doubts about.

It is also possible, and even necessary, to take risks with the product. However, in this case, risk should imply product improvement. But here, too, cautiousness is welcome – therefore, before going for the radical measures, it is worth launching a test for a future upgrade.

Why it is okay to take risks

Every entry into a new business is a risk. When in a new business, one must immediately realize that it may not work out at all. This is a healthy approach, especially when the new business is fundamentally different from all the previous ones. Risk always exists, so set yourself up so that, in fact, you invest in nothing and may one day lose everything.

But such a masochistic trick trains personal endurance very well. And when a startup goes up, there are much more positive emotions than with initially inflated expectations.

Keep in mind that it often happens that the risk turns out bad. However, take this philosophically: you have tried and have got an experience; if you would not risk it – you would not be enriched with new knowledge and would suffer all your life knowing that you did not try.

Is it truly so 'no risk – no reward'? Perhaps yes. It is only worth remembering that there is common sense, logic, and an adequate assessment of one's capabilities behind every calculated risk that paid off.