Risk, Uncertainty And Playing It Smart

Risk can be more measurable and deliberately approached.

I have often heard the mantra, “Go big or go home.” It sounds motivating and paints the classic picture of the daring entrepreneur overcoming the odds. I do think it has application in many areas. For example, I view the use of time this way. If you are going to pick an endeavor to spend a lot of countless and exhausting hours, then why not pick something big. Working hard and taking risk on small endeavors is not a great payback, comparatively.

Going into what pursuits are worthwhile is another topic altogether. Assuming you have picked what you want to win at, it can be detrimental to take on unnecessary risk prematurely. Risk is necessary and good, but should be proportional to your knowledge and probabilities of success.

If you want to start a business or invest in marketing, there is often a lot of uncertainty. Here are some ways to approach the unknown and play it smart:

  • Test the concept. You can always take a big picture and narrow it down to something that proves the point. In software, beta testing is often used to engage a subset of a larger audience so that the downside can be managed on a small scale. The key is understanding the concept that needs to be tested. The assumption is that if it works on a small scale it will work on a larger one. Before building a large location, start with a small one. Instead of investing thousands in a marketing campaign, start with a smaller project. The feedback will prove vital for going forward.
  • Work with real people. It’s tempting to create a whole strategy and world in the abstract. Until your product or service works with real people in real scenarios, it’s all a pipe dream. Many products are refined by working with cooperative customers first for a lengthy period of time. You can see how a real person will use the things you have set up instead. They may not do what you expect. This is an opportunity to redesign on the fly and enhance the user experience. Real people, not abstract ones, are a wealth of knowledge to integrate.
  • Limit the battles. Trying to solve too many problems at once is difficult and can suffocate your efforts to grow. Try and limit your challenges to one front at a time if possible. It may be tempting to solve multiple problems at the same time, but getting to 90% in one area before moving on to the next allows you to address issues and delight the customer with a singular focus.

It is wonderful with all the technology and systems that are available today. It is much cheaper and more sensible to approach uncertainty by testing assumptions and getting feedback at much lower cost structures. There are likely scenarios which you can apply this immediately that would curtail unnecessary risks.

Where could you apply this?

Published by Don Dalrymple

I partner with founders and entrepreneurs in startup businesses. I write and consult on strategy, systems, team building and growing revenue.

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