Risk in business.

Earlier on, in a post on definition of an entrepreneur, I'd written about the must-have trait of risk-taking. In the past couple of days I've run across a couple of viewpoints on risk that brought home the fact that risk-taking is not an on or off, black or white thing. It's very individual and situational, and is about one-size-fits-all as a contact lens.

First, I read a blog on corporate entrepreneurship. Yes, that phenomenon exists (I can personally attest to that), and corporations are frequently smitten with the urge to develop 'entrepreneurship', along with its twin 'innovation', in order to stay ahead of the running of the competitive bulls. There was a post in this blog on creating a 'decision-making network' - i.e., managing risk by spreading it to your network within the organization. In the corporate world the decision to take a risk is less likely to be an individual one (management by consensus anyone?). There are steering committees, audit committees, planning committees, strategy councils and of course the BOD (no, not that bod - the board of directors). Anything you take on will most likely fit into some approved master plan. And when you do get the green light, there are enough people to pick and choose for your 'support network' to deliver on the idea. Yes, championing a new initiative may be risky, but it is less likely that it has sudden-death consequences for the company (though getting fired may feel that way to you). Most of all, you don't have the burden of making payroll hanging over your head.

The entrepreneur's risk is a different beast, larger, faster and with more teeth - and lurking within pouncing range. In the early stages the very existence of your business is at risk, and that too on a daily basis. Sudden-death is not an imaginary monster under the bed, but a dwindling cash balance without visibility of revenue or funding. Which is why you do so badly want a founding team. You hope your co-founders will have skin in the game, not so much to lessen the risk, but so you don't have to face it alone. This is not like the network you'd have in a corporation, where you could have the luxury of focusing on the specific project. Here you, and your 'network' (read your whole startup team) have to focus on the survival of the whole business. And just to keep you sharp, you have to simultaneously focus on growth, innovation, and staying ahead of the ever-threatening competition.

The good news is that as the business grows, the visceral impact of the risk lessens - the 'death' is no longer likely to be 'sudden'. You get the warm fuzzies from receivables, and possibly funding, floating you for months at a time. You can keep the edge, but lose the sweat.

If you're a risk-taker in your corporate life, you could possibly be primed to be an entrepreneur too. Just remember that grabbing your tabby's fluffy tail, risking scratched arms and snagged clothing, is nothing like doing the same with a tiger.