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Entrepreneurs as Risk Takers – Debunking the Myth Entrepreneurs as Risk Takers – Debunking the Myth

By Phil Gibbs on August 19, 2013



OK, I admit it. I am an entrepreneur. Yes, I love new ideas – I love seeing the ideas become reality and become real businesses. Or at least make a valiant effort at becoming real businesses.

As an entrepreneur, people tell me that they admire the risk taking involved in starting a business — funny, it just struck me that my wife has never told me that!  It is a common assumption that entrepreneurs are risk takers — riverboat gamblers.  And some might argue that riverboat gamblers are conservative compared to entrepreneurs.

But I don’t buy it. In fact, I might argue that entrepreneurs would fall in the middle of any risk-taking continuum, perhaps moderate risk takers on a continuum from risk avoidance, to moderate risk taking, to high risk taking. That flies in the face of common wisdom, but let me offer a few thoughts.

As a co-founder of E|SPACES, I will use my experience with this entrepreneurial venture as an example. The idea for E|SPACES was conceived around 2006 but the first center did not open until 2010. During that period there was extensive thought, research and design work that went into developing the concept.

When it came time to launch E|SPACES, I really did not consider it to be a risk. I thought it was a great concept that would be embraced by so many people that there was no way it could fail. We were redefining an industry and swimming in “Blue Ocean” as defined by a popular strategy book at the time. And if it did not work as intended, we had a fallback plan that mitigated any risk and was written into the business plan.

So, that certainly doesn’t sound like a riverboat gambler. It might be labeled naivetÈ, extreme confidence or even arrogance, but certainly not high risk taking.

Now I must confess that once the trigger was pulled and construction had started, there were and continue to be days when I wonder, “What have I done!” but that is another story.

Just as there are people who talk about the risk involved in being an entrepreneur, there have been a number of people who tell me when they see E|SPACES, “You know a few years ago, I had this very same idea. I wish I had done it.” After I roll my eyes, I wonder, “Am I a risk taker or are they?” Is it a greater risk to follow or not to follow your dreams? Kind of depends on how you frame the question, doesn’t it?

By the way, have you ever seen the due diligence process that investors in early stage ventures, many of whom are former entrepreneurs, go through before they invest — or more frequently don’t invest?  It makes getting a bank loan look easy. Those guys certainly appear to be risk averse on the risk-taking continuum.

So the next time you meet a true entrepreneur, don’t get caught up in the myth that we are all crazy risk takers. You are probably looking at someone who is a little naÔve but very confident in his or her idea — sure that it is the next big thing.  And it just may be.

 

Phil Gibbs is Co-Founder and CEO of E|SPACES

TAGS: Entrepreneurs


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