I'd like to debunk some conventional wisdom about success and failure in business. Namely, this broken circle of logic:

  • A. Entrepreneurs and business leaders have to take risks in order to succeed. 
  • B. Younger people are more likely to take risks than older people. 
  • C. When taking on a new challenge or starting a new business, older entrepreneurs and business leaders are more likely to be successful than their younger counterparts.

A plus B does not equal C. Why? 

Conventional advice about risk and failure is poetic, but often useless.

Most of the platitudes associated with risk and failure are often just a word salad: A term I use to describe phrasing that sounds profound when you first hear it, but on reflection doesn't make a whole lot of sense. 

Take your pick from these success-rooted mantras that I know you've heard before:

  • Fortune favors the bold. 
  • Go big or go home.
  • Fail nine times and get up 10.

To hammer my point home, that last one is not a quote from Winston Churchill or Michael Jordan, but rather from Jon Bon Jovi. For the young risk takers among you, he was a musician who found success in the 1980s with hair-metal hits like, "Livin' on a Prayer."

It's very romantic stuff. But in a vacuum, those slogans are just a salad of nice words tossed with a low-calorie motivational dressing and served by a guy on top of a mountain with his arms outstretched.

Failure is something you should expect, not strive for.

I'll be the first one to tell you that it's OK to fail. And in fact, I'm right there with the throng of folks who will encourage you to go out and take risks, especially when you're young. 

The thing I don't want you to do is spend years--or even an entire career--not realizing your potential because the system told you that success can be found in a title, a corner office, or a fat 401(k). 

I encourage entrepreneurial thinking because the world needs more innovators. And I believe the world needs more innovators because the world needs to be a better place. I want you to be a part of that equation. So I'll tell you that success, however you define it, does not come without risk. Innovation does not come without failure. 

But I'll also tell you that failure sucks. Risk tolerance isn't the ability to absorb the pain of failure, it's the ability to ignore the ramifications of failure before it happens. It doesn't change how much failure hurts. 

Risk is something you should mitigate, not tolerate.

The fact is, young people are less afraid to fail for two reasons:

1. They believe they have less to lose.
2. They have a longer timeline for recovery. 

When you're young, you have time to absorb a dozen life-crushing failures. It's the same reason why long-term investments are usually riskier than short-term investments. But when your investment portfolio keeps making a killing and then goes to zero, you're still left with zero at the end of the day. 

Risk tolerance is driving off a cliff over and over, surviving, and assuming on that last run that you have somehow learned to hit the brakes just in time. But risk-tolerance in business is not a secret weapon. Or a safety net. 

Risk mitigation is driving right up to the edge of the cliff to get a good sense of how disastrous the crash will be, without driving off it. That's what those older entrepreneurs and business leaders have figured out. Me included. So with that in mind, let's revisit those awesome failure platitudes:

  • Fortune favors thinking bold and acting wisely.
  • Go big, but go with a backup plan.
  • Fail once, learn, then get up.

None of those are romantic. I won't be known for my hair-metal hits. 

Think risk reduction, not risk tolerance.

It's OK to be afraid of failure. It's OK to hate risk. Risk mitigation is simply the act of facing failure and replacing ignorance with bravery. Or wisdom, which is really just learned bravery. 

It's only when you acknowledge the possibility of failure that you can begin to proactively avoid it. And it's only when you understand the brunt of failure that you can properly balance risk versus reward. 

So stare failure square in the face. Because in the equation above, A plus B does indeed equal C. Once you replace risk tolerance with risk mitigation, you realize that success has nothing to do with how much risk you can tolerate, it has everything to do with how much risk you can eliminate.