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Popular as well as business literature often define an Entrepreneur as one who takes risk. This risk is defined in different ways and literature establishes that an entrepreneur makes profit from risky ventures.
I remember inviting one of my friends for an interactive session with one of my classes, where I was teaching Entrepreneurship. He is a very successful entrepreneur and first generation at that. After working for 5-6 years with companies like L&T, he set up his own venture and today his manufacturing facility in India supplies globally to some of the best known companies in the world. His clients are mostly Fortune 100 companies.
He mentioned upfront “I am successful not because I ‘take’ risks, but because I dabble in areas carefully and with meticulous preparations, that most others find ‘risky’.”
This summarises the point I am trying to drive home. Entrepreneurs define ‘risk’ differently. Risk is defined as exposure to the chance of injury or loss. Given this simple definition everything is risky – some less than others. Some where the less may be negligible also, including the ‘hand of God’. So a risk is not about an event or an activity, it is more about assessment of this ‘exposure’ to the chance.
The chance is defined by the horse rider, ability of the horse rider, training of the horse in safer environment etc and not only by the chasm between two cliffs. For many riding a horse may also be risky. An entrepreneur therefore defines the ‘exposure to chance’ differently, identifies what could prepare him to jump over the cliff, prepares and pursues actions to build those capability, trains well and gains confidence before taking the jump. It therefore is not ‘risky’ for him.
An entrepreneur follows a 4P formula for success – Pick Out, Prepare, Present and Persevere.
An entrepreneur must focus on and develop an ability to spot an opportunity in the thick of options. The ability to Pick Out an opportunity – a large problem or a problem that large number of people face. This size or complexity of issue could deter most. The entrepreneur on the other hand is attracted by the enormity of the issue and sees ray of hope and opportunity for success in such complexities. Deborah Mills Scofield (HBR, 2012) says that most of the entrepreneurs would gladly risk a few outputs for an outcome they believe in. She clarifies this further by saying that outputs (such as products, profits, etc) are necessary and good, but they have their most profound effect when driving significant, palpable outcomes — like reducing chronic pain, creating a prosthetic leg for an Olympic runner, or inventing an app that eliminates a time-consuming task. This fairly illustrates the Pick Out ability or intent of an entrepreneur and what influences his success.
He then focuses on calculating ‘exposure to chance’. This helps him Prepare on covering the exposure well. The more he is able to cover the ‘exposure to chance’, the better he is prepared to handle it successfully. The more he covers against the ‘exposure to chance’, the more he sees the opportunity. The real trick is to focus on either ‘exposure to chance’ or a tiny bit of opening to cover the exposure. This leads to the 3rd P – Present.
An entrepreneur will view and present a picture of the success, howsoever small it may seem. He does not ignore the exposures to chance, but prepares for and presents what if it becomes successful. Therefore he lands up finding more and more of what he focuses on. The more he presents and focuses on the positives that may come out of it, the more of it comes out for him.
Success is not something that comes easy to anyone. It requires one to Persevere with efforts and focus of intent. A successful entrepreneur prepares for and starts with baby steps, but relentlessly keeps his focus on the target. This is what gets him what eludes others. This is what converts ‘risk – exposure to chance’ to ‘entrepreneurship – an opening to success’.
So the mantra is identify a problem that large number of people are facing; inverse the logic and see what could make it succeed; focus on the positives; identify and preserver with right actions with an open mind – success is only waiting.