The following is an article “Entrepreneurial Risk Taking”
by Marc Primo.
The truth is, entrepreneurs are not the crazy gun-swinging risk takers everyone makes them out to be. As humans, we are risk-averse. It is in our DNA. We tend to prefer food and shelter we can count on rather than rocking the boat. Putting the essential things in life, on the line, is not an easy decision for anyone.
There is no denying risks are very profitable, but no honest entrepreneur will tell you they enjoy taking risks blindly.
Here is what to watch out for:
Optimistic bias
Being overly optimistic can be counterproductive. Having a good attitude is great only as long as you don't turn a blind eye. Lack of experience can lead anyone to underestimate or overestimate, the nature of the risk. When we have an optimistic bias, we conjure up a none existing immunity to risk.
Availability bias
Events that happen close to or around us alter how we estimate the probability of it happening to us. For example, you are more likely to safeguard against heart disease if someone in your family suffered from a heart attack. In the same way, you are more likely to realize the truth behind risks if you have people around you that have already gone through them. As long as you perceive failures as being far from your radius it can be hard even to imagine it happening to you.
A calculated risk
The entrepreneurial community has taken a liking to learn from mistakes. Very well researched and premeditated risks are widely accepted. These measured failures are steps forward. When what can go wrong is planned for, you can either prevent it or learn from it.
Risk tolerance varies from person to person. You need to be honest with yourself about the situation. In the end, a calculated risk needs to answer only one question. Can you live with the consequences?
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