This is another guest post by Jim Beach, Author of McGraw-Hill’s School for Startups, which contends that entrepreneurship is not about risk, creativity or passion. It is a follow-up post to his article last week on passion.
I really did appreciate the fierce feedback on my blog about passion. I have nothing against those of you who have passion for the business is that you run, and therefore you should respect my opinion that reserving passion for things more human is one possible route. But let’s continue this discussion about what truly embodies entrepreneurs. What about risk?
Many of you, I am sure, will relish in the opportunity to tell me about the huge risks that you took, or that a friend of yours took, when you started your business. In fact, many entrepreneurs are proud of the risks that they take, embrace these risks, and in their personal lives even seek out greater risk.
Joe Abraham wrote a great book called “Entrepreneurial DNA” which argues that just as all dogs are not the same, all entrepreneurs are not the same either. I highly recommend his test at www.BosiDNA.com. He concludes that there are four types of entrepreneurs; builders, opportunists, specialists, and innovators, and that these business types are different as pit bulls and lapdogs. Think about Donald Trump and his multitude of industries and Bill Gates who is been happy in one industry for his entire life. So, I think that we all should be able to agree that as entrepreneurs we are not necessarily inherently the same. I am an entrepreneur, and studies indicate that there is at least a third like me, and I hate risk.
When you meet an 18-year-old dreamer, a 45-year-old nostalgist, or a 58-year-old unemployed person, they frequently express their desire to be an entrepreneur, but also express their fear of risk. I beg them to join me in a definition of entrepreneurship that excludes risk. Now those of you who got mad at me when I tried to exclude passion from my definition of entrepreneurship will undoubtedly be even more upset if I try to eliminate risk as well. But please just as I accept your standards, it is only fair if you accept mine, in the way that I choose to live my business and personal life. Now if our dreamer, nostalgist, and unemployed friend failed to act on their entrepreneurial dream because of risk, it is most unfortunate. If we can create an entrepreneurship, say one that limits fiscal risk to under $5000, isn’t that something that we should strive to do? By limiting the amount that you allow yourself to spend, you dramatically reduce risk and perhaps by doing this, it will be become possible for you to actually fulfill your dreams.
When we talk about risk there are many things that this can include. We can risk our time, our health, our reputation, our relationships, and our money. My past entrepreneurial endeavors have cost me greatly. I have been divorced, incredibly sick, and incredibly bankrupt. At one point a doctor left the exam room to get me a hospital bed, and I redressed and used the back door to exit, because I had a more important bank meeting, yes more important than being admitted to the hospital. And at one point I was about $10 million in personal debt. I feel like I know something about risk. I hate it.
But please don’t wait on the sideline due to risk! Limit your risk by limiting the amount of money that you’re willing to invest. By setting a limit of $5000 you may eliminate some forms of business that you wish to start. But that’s okay. If you study it and actually look around you will find that many, if not most, of the successful serial entrepreneurs in the world started their businesses with very little money. The invention of venture capital is after all a relatively new invention and millions of successful businesses were started before millions of dollars of startup capital became generally available.
Leave risk to the skydivers add sleep better at night by the eliminating risk from your definition of entrepreneurship. You will be happier, but most importantly you will be more likely to actually start a business today.
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What are your thoughts about entrepreneurship? Do you agree with Jim’s points or do you feel differently? Why not comment and share your thoughts with the world?
Posted by: Mike Clough