Becoming wildly successful is the result of a combination of factors — pure chance, hard work, and taking risks.
Pure chance isn’t something you can will into being. Working hard takes sheer grit and a long time. What you’re left with is the power of risk.
Every entrepreneur or aspiring entrepreneur faces risk. You can take the business risk and succeed. On the other hand you can avoid the risk, but never entertain the possibility of wild success.
Whatever risk you’re considering, here are eight questions that I suggest asking yourself.
1. Have I wanted to do this for a very long time?
If you answer “yes,” this is your first tell. Take the risk. The very fact that your desire has persisted in your mind is an indication that you should go forward.
2. Am I okay with “the worst thing that could happen?”
A helpful way to consider a risk is in light of “the worst thing that could happen.”
You’re faced with a decision to take out the loan, quit your job, sell your company, launch the new product, or acquire another company, and your mind is full of the things that could go wrong.
You should entertain the possibility of failure. Many entrepreneurs were spectacular failures before they were insanely successful. Richard Branson tanked two companies before Virgin took off. Steve Jobs had a rocky road with
According to the research of psychologist Daniel Kahneman, we tend to overestimate the possibility of bad things happening. Known as the availability heuristic, this habit of thinking can limit our ability to make rational risk choices.
Is failure really that bad? Or even that likely? Failure is not that bad if you can learn from it and get it over with. Besides, if you do happen to fail, you’re that much more likely to succeed on your next attempt.
3. Will I regret not taking this risk someday?
Fast forward ten, twenty, or forty years to the end of your life. What will you regret? Will you regret not having taken the risk?
In my mind, this is one of the most helpful ways to view risk. Don’t simply ask yourself what could go wrong. Instead, consider the risk of inaction.
The worst thing that could happen might be not taking the risk. When you refuse to take a risk, you sabotage your potential success.
Your whole life is a series of risks. You get to choose which risks to take. Often, the refusal to take a business risk is itself the riskier alternative.
4. Does the potential success of taking the risk outweigh the present condition?
Make sure that you’re willing to live with your decision. Only take a risk if you know that a successful outcome is going to be superior to your current situation.
If you’re not sure whether or not it will be, then consider it a risky experiment. As Ralph Waldo Emerson wrote, “Don't be too timid and squeamish about your actions. All life is an experiment. The more experiments you make the better.”
5. Are my business partners eager to take the risk?
A business risk requires the business buy-in of cofounders, investors, and key decision-makers. In many cases, the leader or founder will be the one pushing to take the risk, but others need to agree with it.
6. Is my partner (or are my dependents) willing to take the risk?
It’s one thing to take personal risk. It’s quite another matter to risk the wellbeing of others.
Even business risks can have personal repercussions. As you contemplate your risk, talk it over with those who might be impacted by failure or success.
If they’re willing to take the risk with you, you’ve gained cheerleaders. If they’re unwilling to take the risk, you may wish to reconsider.
7. Can I identify when the risk is clearly headed for failure?
Some wild-eyed entrepreneurs refuse to consider failure as an option. They say “no” to any Plan Bs, alternatives, parachutes, or escape plans.
While gritty determination is to be applauded, it’s foolish not to count the cost. Failure is always an option. You need a plan in case everything goes up in flames.
Amazon’s Jeff Bezos has a few failures in his resume. Reflecting on these failed attempts, he said, If you get to a point where you look at it and you say ‘we are continuing to invest a lot of money in this, and it’s not working….On the day you decide to give up on it, what happens? Your operating margins go up because you stopped investing in something that wasn’t working. Is that really such a bad day?”
Funny guy Scott Adams, creator of Dilbert, does this: "I go into most risky projects (and those are the type I prefer) with two contradictory thoughts: one, this sort of thing is unlikely to succeed and two, this will totally succeed. I hold both thoughts until the last dying gasp of a project. I can't think of a time I thought I would fail without simultaneously thinking I would pull a rabbit out of the hat at any minute."
Stay committed to success. But have a plan B. Just in case.
Conclusion
I don’t want to discourage you from risk. As long as you’ve weighed the consequences, considered the outcome, and contemplated the advantages, make a decision. Don’t overthink it.
The longer you think about it, the more objections you’ll come up with for not taking the risk. I encourage you to take wild, glorious, and irrational risks.
Success comes to those who take risk. History remembers those who take risks. There are rewards in risk, even if the reward is the exhilarating experience of the risk itself.
It’s probably time to start overthinking it, and start risking it.
What questions do you have when facing a risk?
