When talking about having left my job to pursue a career in entrepreneurship, I often get a comment something like “oh, but not everyone is willing to take a risk like you did.”
A commonly held view of entrepreneurs is that they are risk taker. I’ve even heard some entrepreneurs boast about the risks they took, because they think that is what an entrepreneur is supposed to say.
I beg to differ. I believe that most entrepreneurs (at least the successful ones) are NOT risk takers.
(Fine print disclaimer: this is obviously a generalization and there are exceptions to any rules).
How I Evaluated Risk
Lets take my story as a case in point.
I believe that my leaving the medical profession and embarking on an entrepreneurial adventure was the LOW RISK option for ME.
Yes, I left a stable, well paid, “prestigious” job.
Yes, I embarked on a path that was uncertain.
Looking at the Upside
The way I weighed the risk at the time is as follows:
(1) I don’t like my job. In fact, I was existentially miserable. One of my main values is creativity and medicine doesn’t allow for that (apart from research, which I detest). I was drawn to the creativity of entrepreneurship (creating something from nothing).
(2) As a specialist I would be in one of the top pay brackets, however my earning potential was capped at around about $200,000 per year and limited by my time. To earn money I needed to expend my own time. As an entrepreneur my earnings would be uncapped and could be divested from my own time. I wanted to be able to not have to work in order to support myself.
(3) Medicine didn’t challenge me, at least not in the right ways. To succeed on the traditional path, you need to be good at rote learning, sitting down and memorizing thick text books. As an entrepreneur, I had unlimited challenge. My success was totally dependent on my own ingenuity.
So from the top 3 points above, its pretty clear the upside of being an entrepreneur: I would be catering to my core values (creativity, achievement) and my earnings would be uncapped and potentially not linked to my own time. So from the upside perspective, it was a no brainer.
What about the downside? This is critical to examine when weighing risk.
The downside of staying in medicine: I would be miserable, always wondering “what if I had tried”, it would quash my sprit and my soul. Pretty dark.
The downside of failing at entrepreneurship: I would lose my savings and would need to go back to work as doctor, one of the most highly paid professions. I knew I would not be sleeping on the streets. (Although this wasn’t really an option for me – I knew that I had this as some theoretical backup, but my motto has always been that I “will succeed or die trying”).
So for me, staying in medicine was HIGH RISK (really!). Entrepreneurship was the low risk path for me, as far as my values and desires go.
I would say that successful entrepreneurs are actually very very shrewd at HEDGING risk.
I will often hear of successful entrepreneurs who are financially free testing new business ideas with very small amounts of cash.
Entrepreneurs are the ultimate hedgers. They actually look at risk very carefully and examine it critically.
Do you have any other examples? What do you think?
Leave a comment below.