Take a moment and consider how many risks you took to get to this point in your career. Seriously, think about it. We take dozens of risks a week, if not a day, to grow our businesses. But why are entrepreneurs willing to--and maybe excited to--gamble their success, finances or even well-being, while others will stop at nothing to not risk anything? Perhaps we're in love with the risk itself.
Science journalist Kayt Sukel talked to scores of risk-takers for her upcoming book, The Art of Risk: The New Science of Courage, Caution, and Chance. Sukel found some fascinating insights, particularly since she herself has taken chances with her career (for her last book, This Is Your Brain On Sex, she had an orgasm in a fMRI machine to document the results).
I talked with Sukel about why we're driven to put nearly everything on the line to achieve more - and learned most entrepreneurs actually need stability to thrive.
How realistic is it for entrepreneurs to become stable enough not to risk their relationships or their health to pursue their passion?
I think it's very realistic. In fact, recent studies show that most successful entrepreneurs have some kind of "ballast." That is, they have a spouse or romantic partner (sometimes it is even a business partner) that keeps them a bit grounded. Of course, in that study, no one asked that partner how they felt as their husband or wife took on these challenges (I can imagine it isn't always comfortable). But I think many successful risk-takers can take the risks that they do because their personal lives offer them a safe place to land.
Health is a different question. But again, everyone has a different risk-taking baseline, so to speak. That is, some people are more naturally inclined, due to their genetic make-up and other biological input, to take risks. They just look at the world differently. For many of these people, I think their health, particularly their mental health, would be more negatively affected if they weren't in a position to interact with the world the way they are driven to.
We often hear of people maxing out credit cards, quitting their jobs or literally starving before they struck gold with their business. Does a successful entrepreneur need to have an addiction or, at the very least, a leaning towards risk?
It's a very common story--there seems like there has to be some kind of great (and often self-inflicted) suffering before there can be success. But the answer is, no, not necessarily. Here's the thing: Risk is not the same as impulsivity. The guy who quits his job on a long-shot, and does so by the seat of his pants, probably isn't going to go anywhere but the homeless shelter.
Folks who risk and end up ruling the day, most of the time, are not acting impulsively. They are not addicts at all. They've done their homework.
But, from the outside, we don't see all this preparation and foundation setting. We only see the jump. That's why it's so easy to confuse the addict with the seasoned risk-taker.
Is taking risks a side effect of passion or do you think certain personalities just lend themselves to risk? In other words, is taking risks a natural inclination or a contextual one?
It's both! Certainly, risk-taking is a complex behavior--and definitely one that is influenced by dozens, if not hundreds, of different genes. But, for decades, psychologists (and now neuroscientists) are learning that people have different risk-taking baselines. One researcher I spoke with told me that, to a certain extent, assessing risk is just running a decision-making algorithm in your head. Based on those different genetic components, all of us may be running a slightly different algorithm as they consider a risk. But those slight differences can result in very different patterns of decision-making over time.
That said, that baseline does not exist in a vacuum. There are all manner of different situations that may make a person more likely to take a risk--and those can range from competition, the social environment, familiarity, and experience, just to name a few. So, more simply, taking risks is both a natural inclination and a contextual one. And how someone considers risk in one situation (i.e., a business), may be very different than how they vet it in a different situation (maybe skydiving or international travel).
How does entrepreneurial failure affect our risk aversion or risk addiction?
That is the million-dollar question! No matter how well prepared you are in the business world, failure is a part of life. But in talking to a variety of successful risk-takers for The Art of Risk, what I learned is they were all in a position to take those failures in stride and learn from their mistakes. They were also incredibly motivated to succeed. As one risk-taker told me, she doesn't fail, she just "hasn't finished yet." Again, from the outside, that may look a lot like an addiction. But if those mistakes can help guide a person to success the next time around, if they have helped them gain a skill or a better understanding of some aspect of the business, trying again is far from impulsive.
Kayt Sukel's The Art of Risk: The New Science of Courage, Caution, and Chance will be out in February 2016.