Risk: Entrepreneur

If you listen to or read material about startups and entrepreneurialism, then you’ve probably heard over and over that you have to take risk! Be a risk taker! Risk! Live out of your car! Max out all of your credit cards! So let’s look at that a little bit shall we.

What is risk?

a situation involving exposure to danger.

What is “Risk Tolerance”

The degree of variability in investment returns that an individual is willing to withstand. Risk tolerance is an important component in investing. An individual should have a realistic understanding of his or her ability and willingness to stomach large swings in the value of his or her investments. Investors who take on too much risk may panic and sell at the wrong time.

That definition of “Risk Tolerance” comes from Investopedia. I think that’s somewhat relevant in the case of entrepreneurialism because most of what we try to figure out deals with money at some point or another.

So Investopedia also has this article about determining your risk tolerance. One of the most important takeaways I think here that a lot of people miss from most of the startup material that’s put out there, is that not everyone has the same risk tolerance.

Right now, I have low risk tolerance. It’s important to me to have security. I want to know that I can make my house payment, fix my car when it breaks, pay my phone bill and don’t forget internet!  There are all kinds of risks that people may not be willing to take for various reasons. There may be consequences to taking on less risk, probably something to do with the rate of growth that you can obtain for your ideas.  I think a lot of the time a person will be ok making that trade off.  It doesn’t mean that you can’t increase your risk tolerance later on too.

When you’re reading those articles or listening to speakers or podcasts that keep saying that you need to take more risk, they might have a different objective or end goal than you do. We can’t all make $1billion dollar businesses! If you do want too that’s great and don’t stop until you make it! If you want to create a $100,000 business the same is true! Don’t stop until you make it! But you have the power to decide how much risk you’re willing to take on.

Another thing that I have started to notice is that these people that yell from the mountain tops to take huge risks, also seem to have a different definition of risk.

Richard Branson points this out nicely in a blog post entitled “The Art of Calculated Risk

Always protect the downside. I think it should be a guideline for every entrepreneur — or anyone involved in business ventures. – Richard Branson

In the end the kind of risk and the amount of it that you take on is up to you. Your risk tolerance can change over time. If you have an idea that you’re passionate about don’t think that in order to see it through you would have lose your house or ruin your credit score to test it out. Go out there and do stuff!

Risk: Entrepreneur

Momentum Injections

Carrying momentum is difficult. I say this as I have not been successful in even beginning to create momentum in writing blog posts!  I’ve written for a blog religiously in the past and looking back, it took quite a lot of energy to pull that off.  At the time I was writing the most, I was excited, it was new to me and I was learning something every day. As time went on it became a chore to try and think of content to get out that day. I would be so happy when some random news broke that I could write about so I didn’t have to think up something of my own.

While I did learn a lot during that time, I don’t think I produced the best content I was capable of at the time.  I lost my momentum after I learned all I needed to about the tools I was using and it wasn’t shiny anymore.  I held off starting to write again unless I felt like I could do it better this time!  Even though I haven’t been writing, I’ve been doing a lot of the same things since I blogged last. In hindsight, I should have been able to write about what I’ve learned all the time over the last three years.

Lately I have been trying to increase my momentum in everything I set out to accomplish. Maybe a lot of you have asked yourselves, “Why can’t I finish anything I start?” or told yourselves, “I just don’t know how to get excited about this anymore”.  I did that…I did that a lot. I was extremely frustrated. I had a 100 ideas and not enough momentum to see them through. I decided to start doing something about it. Hopefully some of what I’ve learned might help you to create the next Facebook or Google! Here we go!

#1 Surround yourself with like minded people

“I’ve heard this before dude…” you might be saying. Sometimes this is hardest thing to do but I think it’s one of the most valuable momentum generators.  When I’m around people that are excited about their ideas, I get excited about my ideas and theirs! They get excited about your ideas to!  You can find meetups near by that could connect you with great people that have similar interests and could even mutually help work on projects.

Take the long shots! Try and reach out to those people that you might not think would respond. Heck, tweet at @RichardBranson or @ElonMusk for practice.

#2 Inject yourself daily with momentum

Find some material/content to read or listen to every day.

#3 Stay rooted

Don’t forget where you came from. I don’t mean Owosso(never heard of it?)!  Keep participating and practicing your passions. If it’s writing “silly node modules” (Thanks @StephenPlusPlus), writing music, writing fiction or making inventions in the garage, just make sure that you stay grounded and keep your passions alive.  Like anything, if you don’t use it, you lose it.  Besides, isn’t it one of those passions that made you begin to want to expand that interest and turn it into something bigger in the first place?

#4 Just Do It

Ultimately you need to just step out and start trying things, learning from them, failing, trying again, failing and then trying some more.  Be a sponge and don’t be afraid to approach those that have gone before us. Surround yourself with people and content that lead you in the direction that you want to go.

Feel free to email me (thomas.schultz@pointlessrants.com) about what you’re working on! I’d love to hear about it!

Momentum Injections