This article first appeared in Forbes in March 2022.
Let me refute an all-too-commonly-accepted myth: Entrepreneurs are risk-takers. I believe this myth, popularized and widely accepted in our society, is simply false. From my perspective, it can also be dangerous because it encourages aspiring entrepreneurs to develop bad habits, and it deters the risk-averse from this career path. Thus, we can lose job creators, important innovations and find ourselves living in a world hampered by the status quo, rather than one benefitted by innovation, and more of our universal problems go unsolved.
My entire career as an entrepreneur has focused on eliminating risk. But I’m not alone, nor am I atypical. Entrepreneurship is fertile ground for the risk-averse—those who detest uncertainty in their universe. And making that distinction not only creates the opportunity to develop more entrepreneurs but also better ones, too. I believe the misconception that all business builders are risk-takers shares a connection to other myths about founders, all of which paint the profession as one that lives strictly in extremes: endless work, no sleep and all hustle, grit and speed.
In today’s world, when baby boomer entrepreneurs are exiting their businesses in mass, I believe we need to establish a clear definition of entrepreneurship to inspire more founders to get into the game. That means eliminating the perception that to start a business requires an insensitivity toward risk. Rather, it calls for just the opposite—a person willing to remove risk from the equation.
My path to becoming an entrepreneur didn’t follow convention. I became a hand surgeon and spent the first decade of my career building my practice. I established a respectable reputation as a physician, but then opportunity arrived. A fellow surgeon offered to sell me his business after he became terminally ill. He owned one of the hospitals where I operated, a small specialty surgical facility. The business was profitable, yet it struggled to recruit enough physicians. I had long recognized the problem and identified a variety of solutions, which I had voiced. I knew the business intimately, understood the market and recognized the potential of the opportunity (both good and bad). So, I negotiated and accepted the offer. I bought the hospital with 12 other physicians and took over as CEO. Within months, we began generating significant profits.
To be clear, risk did factor into my calculus. In fact, it consumed my consideration. I devoted enough attention to vetting risk that I could account for all the factors that reinforced and mitigated it. I devoted myself to the process of “risk evaluation,” a crucial discipline I would argue all successful entrepreneurs apply. I’ve found that for those outside the profession, many tend to disassociate risk analysis and entrepreneurs. Thus, they assume entrepreneurship is only fitting for those with an idea and the bravery to bring it to fruition.
Whether you fear the consequences of starting a business or aspire to grow a successful company, I recommend that you engage in three important behaviors to properly analyze risk. In my experience, they improve the success rate of any founder.
See entrepreneurship differently.
First, refine your definition of entrepreneurs so it no longer includes the extreme connotations of what it means to live and work as one. Acknowledge that entrepreneurship is grounded in careful and thorough analysis, intention, deliberation and many of the qualities we subscribe to the risk-averse. By seeing entrepreneurship in this light, you become far more likely to adopt behaviors that set your business up for success and avoid those that facilitate failure.
Embrace risk evaluation as a discipline.
Why do you need to develop a business plan? Why do you need to understand your total addressable market, competitive landscape, go-to-market strategy, etc.? The simple answer: risk. Make sure you engage in these timeless and prescribed activities, which are universally accepted and documented (a quick internet search will reveal them). If you skip this process, starting a business becomes a gamble.
Treat your business like an investor.
If someone pitched your business to you, would you invest in it? Why or why not? It can become easy to marry yourself to an idea or vision of growing a successful business. Objectivity is an important safeguard in the ideation phase of your startup. So, take practical measures to create emotional distance, such as evaluating your business from the perspective of a current or potential investor.
Entrepreneurship is not simply about focusing on reward. It’s about recognizing risk and evaluating it objectively. Contrary to what many believe about this all-important profession, you don’t need to tolerate risk to start a business, nor do you need to ignore it or let it go unattended.
Don’t buy into the myth.
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