Risk is Relative

High flying Stunt riders
The experts make it look easy. Their risk is far less than an onlooking amateur. From Car Crazy Rob’s Flickr photostream.

The remarkable feats that stunt experts perform before our eyes in movies or in X Games lore puts me in a state of awe every time. I wonder how a person can flip a motorcycle or jump off a building safely. The hours of trial and error must have been both painful and exhilarating. And I get to enjoy the fruits of their labor in a staged event missing the hours of failure altogether.

The stunt man puts on a show for me, and they give me an illusion of risk. I could not perform what they are doing because I have not even tried, much less determined, if I have the nerve to start. The danger is self-evident and intuitively, the work to get where they are at is overwhelming to think about.

But, what appears as risk to us is much less risk to the stunt experts. They are calculated in the risk they take based on their abilities and the cost of failure they have been willing to tolerate. It’s not much different than anything else in life. Their high risk is an illusion to the outsider compared to the knowledge of an insider.

How Entrepreneurs Approach Risk

Entrepreneurs are perceived as gallant risk-takers by those who have not ventured into such unknown waters. However, I have found that entrepreneurs habitually take calculated risks. That is, the successful ones do. They iterate and figure out problems with measured risk continually seeking answers. They are comfortable with the process of failure to get to success.

Outsiders to the process have an illusion of risk. What is risky to one person is not the same risk to another person. When you don’t know what you are doing, the risk is high. For someone who does know what they are doing, it is much lower. This is evident when an expert is speaking with an amateur. The former is comfortable because they know what they are doing and see the obstacles, opportunities and costs differently based on their abilities. The latter tend to blanket a scenario with an untrained and naive perspective because they have not been tested or know what they are doing. Thus, they face much higher risk because there is more uncertainty for them based on their abilities.

The entrepreneurial mindset is different than the average person’s. There is a comfort with the unknown and an embracing of continual learning to overcome the uncertainty of new situations. The process and approach is about reducing risk by gaining knowledge and insight into what works.

The Only Certain Thing Is Change

We are fully in the information age, and if the last decade has shown you anything it is that the only sure thing is change. Things will dramatically change next year and the next ten years. If you rest your laurels on a misconception of what risk is and manage your business or life by resisting change, then you are creating greater risk to your present position. The probability that the things you are doing today will be relevant or work tomorrow is a failing strategy when the world around you is moving like tectonic plate shifting.

So, here’s the point. Get comfortable with taking a chance based on your ability, and stretch a little more. The important thing is that you decide and take action before circumstances force you to do so. It will give you an edge over everyone else who merely wait for the world to dictate their fate. The habit of risk taking actually reduces your overall risk.

So, how about it? What action do you need to consider?

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