Is Starting a Business too Risky?

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Education & Training with R World Properties, Inc

Jim Collins is interviewed in the latest issue of Inc. I loved this interview and wanted to share one piece of it with you. You may know Jim Collins from his writing. He’s the author of “Built to Last” and “Good to Great”, two best-selling business books. He has some poignant insight to share here. My favorite part of the interview was when Collins talked about the different between ambiguity and risk as they relate to running a business. People think going into business for yourself is risky, while getting a job is less risky. I’ve always felt working for someone else is ultimately a bigger risk, but Collins states his case here a lot better than I have myself. Let me know what you think! Here’s his response to a question regarding risk management being an essential part of entrepreneurship…

Not risk. Ambiguity. People confuse the two. My students used to come to me at Standord and say, “I’d really like to do something on my own, but I’m just not ready to take that much risk. So I took the job with IBM.” And I would say, “You’re not ready for risk? What’s the first thing you learn about investing? Never put all your eggs in one basket. You’ve just put all your eggs in one basket that is held by somebody else.” As an entrepreneur, you know what the risks are. You see them. You understand them. You manage them. If you join someone else’s company, you may not know those risks, and not because they don’t exist. You just can’t see them, and so you can’t manage them. That’s a much more exposed position than the entrepreneur faces.

Let me know what you think! I think this viewpoint is timely because entrepreneurship is on the rise. More and more people are looking into the possibility of taking the risk upon themselves. Of course, if you’re inept at handling or understanding risks as they relate to your business, then you’re in for trouble. I think the failure rate at business is not because business is risky. It’s because so few of us are actually good at it.

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building a business
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