Risk. It seems to be at the heart of entrepreneurship. Whenever I ask a group to describe entrepreneurship, the word risk is always one of the first things people mention.
Most often people associate risk with failure — we call it “sinking-the-boat risk.” We know that only about half of entrepreneurial ventures make it five years (for the record, the 10-20% figures most people cite are urban myths). The complex and uncertain economic times that we now face only heighten the risk of failure in people’s minds.
The other type of risk is one that is not always given its due. There is a corresponding risk associate with not pursuing an alternative — we call this “missing-the-boat risk.” Entrepreneur Charles Hagood, co-founder of TAG and HPP, describes this type of risk in our book Bringing Your Business to Life, “We weren’t as aggressive in the very early days as we probably could have been. I think we didn’t realize all we had to offer. I think we lost a lot of opportunities in the very early days, not recognizing what was there.”
Just as the risk of failure can increase during tough times, so can the risk that we miss viable opportunities. People seem to get too cautious during times like these. But, a slow economy and inflation do not shut down new opportunities. There are still many great markets that are untapped or underserved and probably fewer competitors willing to take the risk to serve them.
Clearly we need to be more vigilant in assessing opportunities due to the enhanced risk of failure that is a result of these tough economic times. But there are still many opportunities out there, and those who pursue them prudently can still find great success.