Do you know that 90% of startups fail? 10% of them fail within the first year. Do I scare you? I hope not. It is the amount of risk we have to take if we are going to begin a startup. But, you know if your startup idea is boosted over years, anyone can’t stop you from becoming a millionaire. So, people who think it is worth a risk will take the entrepreneur path.
Elon Musk the founder of Tesla, SpaceX, and many more companies can be called as ‘Mother of Risk Takers’. He began a startup called x.com which became Paypal later. He gained $165 million from selling Paypal to eBay. When he started SpaceX and Tesla he invested half of his money in those companies.
In those days private space traveling is a dream. He lost a lot of money for a dream. He dreamt to make civilization on Mars (Yes! the planet). So, he had to invest all of the things he had. Otherwise, his company will go bankrupt. At some interviews, he says that he had to borrow money from friends for day-to-day expenses. Now, you may know where he is. He is nearly $ 200 billion worth in 2021, one of the richest men on earth. But, still, he is working his ass off to land on Mars which was his dream from the beginning.
Taking risks does not mean going into startups blindly and thinking it will become a success overnight. The risks you take should be realistic and calculated risks. Being bold is not always a smart option. You should have a risk-taking strategy. Thus, you will be able to get the most out of it. In my mind, reasons for taking risks as an entrepreneur can be narrowed down to 5 points below.
1. You should try to know
No matter how much you calculated the risk or how much you planned the business, you never know what will happen, unless you try it. If you want to succeed you have to take the risk. There is a saying which emphasizes this- “If there is no risk, there is no reward”.
We can’t predict everything in the future. If you are building a business there would be problems to solve. It is the nature of the business. With time you need to build a strategy to answer the issues. I think now it’s clear to you that you have to get into the new waters to know what it is accurately.
2. To grow you have to take risks
The famous entrepreneur Jack Ma the founder of Alibaba group once said that “You should learn from failures, not success stories”. When we take risks sometimes we fail, sometimes we succeed. When you fail from something there are always things to learn from it.
As I said before, you can build a strategy to minimize the harm after taking risks. Anyway, to learn and grow we have to take risks, otherwise, we will stay in the same state for years.
3. New things come with risks
Innovation is finding new things or introducing new things which the world has never seen before. So, to do an innovation you must take a risk. To create new things you have to do a thing that the world has never done before. Doing a thing that did not exist before is a real risk.
Innovating self-driven electric cars was a dream for the world. Tesla got the challenge. They were not successful at the beginning. Due to that Tesla was so near to death. At last, they overcame the challenge and got the vehicle out. They risked their company for the product they manufacture at that point. (It is too much risk in my perception). Anyway, if we are going to do a new thing we can’t avoid risks.
4. Competitive advantage in taking risks
Commonly people tend to avoid risks. It is human nature. So the entrepreneurs who take risks have their competitive advantage doing new things. As in the example above, no one tried that harder as Tesla to manufacture self-driven vehicles. So, for today in 2021, there is still no competition for them. So, those who take risks already have a competitive advantage over others.
5. Risk-takers are satisfied with what they do.
Most of the time people do not like to take risks. In a study, they have found that risk-takers are more satisfied with life. The psychology behind this is people who take risks are likely to try what they like. Maybe they could be successful or unsuccessful but, still, they at least tried to do what they like which will lead to satisfaction. In contrast, non-risk takers do what they do for years besides what they like. So, they are fed up with life, because of not taking the risk.
Well, now do not misunderstand the facts and always try to take risks. When you take risks you have to take calculated risks. Do not put everything on the steak from the next day on. You can avoid unnecessary risks and say no to new ones which you have had in the past experiences. You may have heard there is a subject called ‘Risk Management. It’s because managing risks are important in businesses. So, if you find the right balance in risk-taking it can be assured that you will be successful and satisfied in the end.