A successful entrepreneur takes calculated risk

Media romanticise the view that being a successful entrepreneur means you need to choose your pill and that will either lead you to ultimate success or failure. Like gambling in a Vegas casino, you either win big or fail big. Sure, that makes a good movie. So does The Hangover… but if you want to learn from real life successful entrepreneurs, you will learn how to take calculated risks and fail small.

I have written before about making your highest value contribution to the world but how do you know what people value most about you before you get out into the world?

Silicon Valley, where some of the biggest tech giants emerge, are famous for the mantra, “Move Fast and Break Things“. Jonathan Taplin wrote a book by the same title, in which he details the popular approach by big tech. Sometimes moving fast and breaking things means to crash and burn but if you move fast and fail fast, chances are it’s only a small fire.

Eric Ries wrote a book called “The Lean Startup“, about creating a minimum viable product, as a way of testing it out. Again, he points out examples throughout the book of products that were released long before they were perfect. I’m going to share a couple of examples below of tests that were a small risk and paid off big.

Test, test and re-test

My clients would be sick of hearing me say, “everything is a test”. As a solopreneur or microbusiness founder, you likely have limited time, money and resources. Everything is an experiment when you are starting out. If you don’t believe me, check out any successful entreprneur, including Jeff Bezos, Michael Dell or Mark Zuckerberg.

Amazon was one big experiment

A phenomenally successful entrepreneur is Amazon Founder, Jeff Bezos, who performed one of the biggest tests in business. Jeff Bezos started Amazon, a catalogue of the “World’s biggest bookstore”, from his garage. Although he didn’t own much stock of books, when he first started in 1994, he was able to have a massive display catalogue because of his unique arrangement with existing book distributors.

How Dell became a successful entrepreneur

Yesterday I was listening to a podcast by Reid Hoffman, founder of LinkedIn, called Masters of Scale. In episode 113, he interviews Michael Dell, Founder of Dell Computers. What caught my attention in this episode was Michael talking about setting up his website, so any of his buyers could easily customise their computer as they were buying online. They could choose their individual components, which completely flipped the traditional retail model on it’s head.

Dell was able to do this because they had such an excellent relationship with suppliers, that they could take the customer orders and then tell suppliers what to deliver the same day. Instead of making what they thought would sell, they sold what customers wanted and then made it.

Facebook started small

Facebook is a household name, however, that’s a far cry from where it started. Mark Zuckerberg, who is now a successful entrepreneur, started from his dorm room. Only people with a Harvard email address could register for “The Facebook”, as it was known back then. Way back before Facebook had investors, advertisers and deep pockets to launch globally, they were available at a single, Ivy League University. Launching on a small scale meant they could start with a minimum viable product, experiment, take feedback and improve the service.

Small and microbusiness experiments

At this stage, you might be thinking, “Danny, that’s great for the big end of town. But what about small business?” I hear you but small businesses are experimenting with their businesses every day. Consider a takeaway shop owner who might taste what he or she cooks to check if they like it. Then, they might give a taste test to one of their family or their employees. When they’re ready to release their burger in the world, they have already created half a dozen versions, performed taste tests and used the feedback to improve.

Is a successful entrepreneur born or made?

Whether a successful entrepreneur is born or made is an age old debate and I may not solve it today. One thing is for sure. Even the most famous success stories have a tale or two of failure amidst it all. They failed and they learned from that failure. That’s how you need to treat your business journey. It’s okay to fail but do your best to fail small. If you risk everything, you might struggle to get back on your feet.

As Jim Collins said it in, “Good to Great“, if you have several bullets and only a single canon ball, don’t waste your canon ball. Fire a bullet and see if you his something. If you miss it, aim somewhere else and try again. When you hit something, load everything you’ve got into the canon.

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